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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

Market Breaking out...They are given us a long time to get in

DJIA 8818.18 +79 SPX 949.68 +10.58 VIX 27.55 -.91 Gold 956.40 +1.70 Oil 72.50 +1.15 Dollar Index 79.69 -.65 TLT (Long Term Gov Bonds) 88.48 +.29 IEF (7-10 Yr Gov Bonds) 88.32 +.32


The market is breaking out and has been doing so for the past week. Past experience has taught me that if it is breaking out you don't get this much time to buy it. Gold is now lagging as oil and the "economic" recover with inflation story is being blasted out into the universe. Still respecting their move into this presentation here but will be shorting soon. The next big move is on the downside as the "economic recovery" flames out and the stock market tanks again.

Bought DUG @ 15.29 Next buy 11.24 will also buy on weakness after this type of hype.
Love the bonds here TLT 88.48 IEF 88.32 both yield about 4%. They are saying that higher oil prices and high interest rates are going to hurt the recovery and the market rally. I am getting the idea that when oil rolls over and the interest rates start to fall they will tell you that that is a good thing and make it seem logical to buy the pullback. What I am saying is when I see oil top and the bonds rally if the market rallies with that I will short into it.


Mikey
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