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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 29, 2009

Putting Lipstick on a Pig

DJIA 8527 +89.55 SPX 924.29 +8.39 VIX 25.88 Gold 937.20 -3.20 Oil 71.01 +1.85 Dollar Index 80.24 +.13 TLT (Long Term Gov Bonds)95.05 +.46 IEF (7-10 Yr Gov Bonds)90.89 +.17

The market rallying now to the end of the Quarter is window dressing and is like putting lipstick on a pig. Every honk they have on is touting some kind of energy play. The charts on most of these look real toppy to me. In fact as we close the Quarter the consensus is looking for the following.

1) A mild pullback in the market that should be bought
2) An economy that is going to recover later this year or early next year.
3) A chronically weak dollar that is going to push up commodities.

Groups they like:

1) Energy..their favorite They like it all Oil service, Clean energy, Producers.
2) Techs ..They love AAPL 142
3) Banks .. They are touting BAC 12.91 and WFC 24.52

They believe that we are going to turn up and you have to buy them before the rush starts and we actually start growing. That is the theme as end of the Quarter window dressing puts lipstick on this pig. Soooooooeeeee PIG PIG


The beat goes on ....Mikey
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