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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 4, 2009

More Good news Spins and expert buy recomendations

DJIA 8688 +13.37 SPX 935.59 +3.88 VIX 30.52 -.50 Gold 977.50 +11.90 Oil 68.34 +2.22 Dollar Index 79.55 +.05 TLT (Long Term Gov Bonds)91.33 -1.11 IEF (7-10 Yr Gov Bonds)89.92 -.31

Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first quarter, data showed on Thursday, supporting budding hope that the recession was losing force.
Initial claims for state unemployment insurance benefits fell 4,000 to 621,000 in the week ended May 30, the Labor Department said.

The week covered the Memorial Day holiday, which could have had an impact on the data.

There was even more goods news in the report as the number of people staying on the benefit rolls after collecting an initial week of aid fell for the first time since January.

In another report, the department said non-farm productivity was much stronger than initially estimated in the first quarter.

"It's good news with respect to the fact that we're looking like we turned the corner in terms of the claims. That's a sign that we're close to the end of the recession, if it holds, and we're also seeing that kind of data in other indicators," said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.
Developing Market Investors Ride Wave Of Optimism

If investors in New York and London are seeing the first delicate signs of a recovery, their counterparts in developing countries say they are witnessing a full-on spring.

After a crushing fall in the last year and a half, stock markets in developing countries are riding a wave of optimism that the recovery of the global economy is at hand and being led by the developing world, especially China.

Though emerging markets remain far below the lofty highs they attained more than a year ago, investors are again viewing their chances of growth as better than those of the United States or Europe.

As a result, the Indian Nifty stock index has jumped by 64 percent in the last three months. China’s CSI 300 index of shares in Shanghai and Shenzhen has risen 37 percent and Brazil’s Bovespa increased 41 percent over the same period. By comparison, the Standard & Poor’s 500’s gain of 28 percent looks modest.

“There was a stampede for the exits in the fourth quarter,” said Gonzalo S. Pangaro, portfolio manager of the T. Rowe Price Emerging Markets Stock Fund. “The market is starting to realize that although these markets face issues, they are manageable issues.”

So much so that analysts have attributed some of the recent gains in the S.& P. to investors’ belief that the Chinese economy is improving. It is not just China that is generating optimism. A lot of improving economic data is bolstering developing countries. While industrial production has rebounded in China, so have car sales in India and retail sales in Brazil.

Could all this be irrational exuberance? Current valuations are extremely rich: the price of stocks on the Indian Nifty is more than 20 times earnings. Prices are nearly 21 times earnings on the Bovespa and 29 times earnings on the CSI 300.

The optimistic view is that these price-to-earnings ratios reflect the return of an appetite for risk in the markets, which normally accompanies a more positive outlook, and a belief that these countries are ready to resume strong economic growth.

The skeptical outlook is that the economies would have to leap to double-digit growth rates to justify these valuations and that that could only mean a bubble was forming.

Emerging markets generally swing more wildly, in both directions, than developed countries do. And each of the big developing economies, the so-called BRIC countries, Brazil, Russia, India and China, face weaknesses that could stunt any recovery.

Exports and foreign investment flows, for instance, which are critical for many developing countries, remain anemic. Government spending has taken up some of the slack, but rising fiscal deficits in places like India could limit how much more policy makers can do to stimulate their economies.

No new buys or shorts today

Orders to buy:
FXP 10.28
GLL 10.78
ZSL 6.54
DUG 15.29 and 11.74
SCO 10.84

Looking to Short:
BA @ 55
MCD @ 62
AEM @ 63
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