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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

Cramer, Buy the cyclicals and an added bonus B Of A could triple

Cramer: Buy Cyclical Stocks Now

Investors should start buying stocks that will bounce when the economy recovers, Cramer said on Thursday. If they wait too long, they’ll miss the move.

The gamble, of course, is always a matter of how long that recovery will take. A recession that lasts longer than expected could hurt the rest of your portfolio. So even when speculating about a turn in the economy, investors still want to play a bit of defense, such as with a dividend.

That’s why Cramer likes PPG Industries [PPG 45.45 0.20 (+0.44%) ]. This chemicals and specialty-chemicals maker is a classic cyclical play, but PPG also offers a 4.6% dividend yield. Between that backstop and the company’s potential to significantly grow earnings when the downturn’s done, investors might be getting the best of both worlds here.



BofA Shares Can Triple: Bank AnalystPublished: Thursday, 11 Jun 2009

Bank of America's Ken Lewis testified at a U.S. House Oversight and Government Reform Committee hearing on the financial giant's acquisition of Merrill Lynch.



But Anthony Polini, bank analyst of Raymond James & Associates, said the hearing is more of a clearing of grievances—and recommended investors buy BofA stock.

“I’ve been following banks for more than 20 years and I’ve never seen a company come out of a recession with so much core earnings power and so much strength,” Polini told CNBC.

“Bank of America [BAC 12.97 0.99 (+8.26%) ] looks like an easy double in a year and it looks like a triple in 2 years from this level.”

“We look at the core earnings power,” he said. “Going forth, the political risk factors, the regulatory risk factors, the economic risk factors — they’re all improving.”

Cramer on B of A

Forget about Ken Lewis’ congressional testimony. The only Bank of America news Cramer cares about right now is Morgan Stanley’s declaration that the earnings estimates are too low.

That’s right – on Thursday Morgan went to a “Street high,” which is a bold earnings prediction far above any other presently in the market. It means that Morgan expects the stock to go much, much higher.

The earnings will come in 2010, Morgan Stanley analyst Betsy Graseck said. She predicted that Bank of America [BAC 12.97 0.99 (+8.26%) ] would generate $2.54 a share next year, a big jump over analysts’ average estimate of about $1. The legendary Meredith Whitney predicts just 20 cents or so. And Graseck’s call is still a full 25 cents higher than the previous top estimate, $2.19, from Wachovia.

Why the confidence? Graseck said mortgage fees, interest rate curves, the net interest margin and the Merrill Lynch acquisition are all contributing to the resurrection of BAC. Yes, even the much-maligned Merrill is playing its part, as the retail and investment banking business continues to grow. The brokerage, it seems, is merging well with Bank of America after all.

Not bad for a bank that some people thought was destined for nationalization. Cramer also likes the potential for BofA’s OREO – other real estate owned – to be a positive here. During tough times, banks are forced to take charges against their OREO. But when the market turns up, as it is now, and home sales take off, banks can unload their OREO. That could push the stock higher.

If all of this happens according to plan, Bank of America might be in position pay back its borrowed TARP funds – possibly as soon as this year’s Q4. That alone would boost earnings, and, in turn, the stock. A possible change in attitude from Wall Street’s other analysts, say, Meredith Whitney, offers another catalyst for BAC. If the stock gets just half the multiple of BofA’s peers, the share price could reach $20.


I am posting these for the record so you can look back at them in 6 months and see what is going on. Cramer likes the cyclicals "Investors should start buying stocks that will bounce when the economy recovers"....or you could miss them...What!!!!

The Remember that B of A just rallied from 3.5 to 15 and just sold 1 zillion shares and now the analysts recco the thing. Santa Maria !!!!

The message is the same don't miss the recovery. In the 30 years that I have followed these guys they have never hung out a sign at the bottom that said buy me.
Bottoms say we are going lower don't buy, not this is it buy now before it gets away from you.
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