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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

Wednesday, June 10, 2009

Slow Roll?

DJIA 8732 -30.16 SPX 937.98 -4.45 VIX 28.83 +.56 Gold 953.30 -1.40 Oil71.40 +1.39 Dollar Index 80.28 +.455 TLT (Long Term Gov Bonds) 88.27 -1.33 IEF (7-10 Yr Gov Bonds) 88.05 -.48

There are signs that we are rolling over. Retailers like JWN and JCP topped in early May. The housing stocks also topped in early May KBH hit 19.57 and is now 14.91. Stocks like MON hit 93 and is now 85. The Financials also topped in Early May with the XLF hitting 13.07 and is now 12.33.

What is carrying the market is the oils and cyclicals. The oil index XLE 52.79 has not pulled back and is near its high. The weak dollar hype has propped up those groups. It is still too early to call a top but there are cracks appearing now. This may be a slow roll off of the top. If we do sell off 10% lets see what they say. If they say buy the pullback then I will say that the top is set.

added to FXP @ 12.27(China Short)
Will pass on AEM short but think it has had it
Added to GLL @14.67 (Gold Short)
Mikey
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