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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

Monday, June 15, 2009

Market,Gold, Oil and Commodities Pulling back as dollar rallies

DJIA 8603 -195.52 SPX 922.16 -23.99 VIX 30.98 +2.85 Gold 929-11.70 Oil 70.35 -1.69Dollar Index 81.57 +.98 TLT (Long Term Gov Bonds) 90.64 +.67 IEF (7-10 Yr Gov Bonds) 89.45 +.38

The stock market is making a 2 week low today and the dollar is making a 3 week high against the EURO and Gold is making a 1 month low. This is all happening with the backdrop of bullish news for the Market and Gold and bearish news for the Dollar. This is very interesting and too early to say that the trends have all changed. We need to listen now and see how the "pros" react. Do they tell us to buy the pullback and not worry or do they tell us to bail out. So far they are saying nothing has changed. I am leaning towards the idea that this may be it but have done nothing today.

Pulled the plug on my Citi buy at 3.25 because of market action.


Mikey
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