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Mikey's Short Term Trading Rules

1) Make up a list of stocks, commodities or ETF's to trade. This list should be names that have good earnings and high relative strength.
2) Monitor this list and throw out the weaker names
3) Buy only stocks or ETF's that are intermediate and daily up (green) and the market is Daily and intermediate term up (green)
4) Buy pullbacks on these stocks to the 20 and 50 day averages
Usually you get 4 to 6 20 day pullback buys and 2 or 3 50 day pullback buys in an intermediate term trend
5) More agressive traders can buy the 7 day average in the first 3 to 8 weeks of the uptrend.
6) Buy pullbacks not runups. A buy should not be easy or exciting but difficult and somewhat scary. DO NOT CHASE
7) Place stop at 5% below the buy price. Do not remove
8) Sell 3 to 5 days after the stock price takes out its most recent 2 week high with at least 15% gains
9) Uptrends that are 12 weeks or more may be ripe for a correction. The first 2 pullbacks to the 50 day are usually safe.
Intermediate term uptrends and downtrends generally last from 8 to 16 weeks with 12 weeks being the norm.
10) Shorting is a viable strategy in downtrends for experienced traders only. In general, reverse the above rules
11) Tweet Mikey @themarketshadow with questions or ideas

Thursday, June 11, 2009

Big Increases in Fed Bond Purchases Unlikely: Report That's a good reason not to buy bonds...right

U.S. Federal Reserve officials are not likely to considerably increase purchases of U.S. Treasurys and mortgage-backed securities when they meet in late June, the Wall Street Journal reported on its website.

However, facing rising bond yields and fresh signs of an improving economy, officials could make other adjustments, the paper said, without citing any sources.

At their June 23-24 meeting in Washington, Fed officials may discuss stretching purchases of Treasury securities or mortgage-backed securities over a longer period of time, the paper said, adding that such a move would avoid an abrupt end to the buying and give the Fed time to assess the outlook.

The Fed has pledged to buy $300 billion of longer-term Treasury securities by autumn and $1.45 trillion of mortgage debt by the end of this year.

The Fed has so far purchased $156.5 billion of government bonds, according to the paper.

Officials could also change the mix of their purchases, the Journal said.

At the last Fed meeting on April 28-29, some policy-makers favored increasing the scale of the Treasuries buying to support the recovery, minutes of that gathering showed, but the consensus at that time was to wait and see.


Any decision to go or stay on hold will depend on how the Fed diagnoses a recent steepening in the yield curve, which measures the spread between yields on short- and longer-term government debt.

Atlanta Federal Reserve President Dennis Lockhart said on Thursday he was open-minded about increasing central bank purchases of Treasury securities, and troubled by rising mortgage rates amid higher bond yields.

Government bond yields are often used as benchmarks for loans such as mortgages, and some analysts worry that higher borrowing costs for businesses and consumers could stunt an economic recovery.

As you know I like the bond market here and now these articles pop up. If it wasn't enough to say that the US would not have a AAA rating and the dollar is going to collapse. I would remind you that in January of this year they announced that the Fed was going to buy long term debt. Guess what now they are going to do after the crap got kick out of them over the past 3 months. They closed the year out at 119.35. That is a decline of 26% or just about the gain in the stock market.
TLT ( Long term Governments) are at 88.48
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