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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

More Bullish "Experts" join the party

We’re “absolutely in a bull market” and U.S. stocks will rally for another couple of years, said Laszlo Birinyi, president of Birinyi Associates.

Birinyi said while investors think that the market "climbs a wall of worry," the market actually fights against a "wall of anxiety."

“Anxiety is in the part of the people who have missed the rally,” Birinyi told CNBC. “And they’re trying to talk the market down so that they can get back in.”

Second Opinion:

Dow at 12,000 By Sept.—Here's What to Buy: Strategist
He advised investors to look at individual stocks and not groups or overviews.

“One of the things we’ve found is that ETFs are terribly inefficient,” he said. “We’re all sold on the idea that if you liked oil at the beginning of the year, and you bought the USO ETF [USO 39.68 0.71 (+1.82%) ] — it’s flat. Oil’s up almost 40 percent! We find that 25 percent of the trading days, even the SPDRs don’t track the S&P by 20 basis points or more.”

Recommendations:

Wells Fargo [WFC 25.02 0.11 (+0.44%) ]

JPMorgan Chase [JPM 34.94 0.10 (+0.29%) ]

BlackRock [BLK 182.60 4.08 (+2.29%) ]

Goldman Sachs [GS 145.15 -1.53 (-1.04%) ]

Deere [DE 45.08 -0.63 (-1.38%) ]

Hermes

Energy Drillers



Notice is is about missing something not the the economy is going to hell in a hand basket. Its all about price now and the bull market. Little attention is being paid to sorry state of the consumer that carries the whole thing. As I said before the Fed is tightening not easing now as validated by the consumer borrowing numbers for the past 2 months. The consumer is falling off a cliff. I will continue to say the problem is going to be deflation and not inflation. You can see that the hype is all about inflation. What they are doing now is trying to get the system liquid for the consumer blowup that is going to happen.

The next bottom will be one of deflation/depression not inflation/growth.

Mikey
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