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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

Tuesday, June 16, 2009

Sell Off continues Pros looking to buy the pullback

DJIA 8542 -71.64 SPX 916.39 -7.46 VIX 32.54 +1.73 Gold 933 + 5.50 Oil 70.59 -.03Dollar Index 81.14 -.41 TLT (Long Term Gov Bonds) 91.83 +.1.05 IEF (7-10 Yr Gov Bonds) 89.84 +.37

Charts: S&P to Fall to 880 then Bull May Return

The recent rally in the S&P 500 seems to have reached a peak for now and could fall back toward 880 points, but after that pullback the bull market will probably be back, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.

“Yesterday’s close below 928 is suggesting the development of a top formation, which in the S&P is pointing to a likely end of this rally,” he said.

A close below 880 points on the S&P [.SPX 915.64 -8.08 (-0.87%) ] would trigger a minor sell signal for a decline to around 810, 800 points, Akker said.

A dip to 800 points would mean the rally from March lows would have retraced around 50 percent, Akker pointed out. Once that pullback has been achieved, it could signal the start of a fresh uptrend, he said.

“Only a close below the November lows of 750 would be bearish and that would suggest that the longer-term bear market could be resumed,” he said. “But we expect the development of a higher low around 810 to 800.”

Starting to think this was the top. My guess is that by mid summer we we take out the lows in the S&P. I would expect the financials to retest the lows and hold and the oils, gold, and commodities to be weaker. The dollar should take out is recent highs and the world recovery should be call into question.

Notice that the "pro" in this article gave us a support at 880 and then a support at 800 to 810 and said he would turn bearish below 750. I think that is the message they are trying to put out now.


Mikey

Bought FAZ (3X financials short) @4.84
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