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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

Friday, June 19, 2009

Talking about the consumer and the economy...Where's the Love?

They say we are going to recover. Let's examine what is happening to the consumer because the consumer is 75% of the economy.

1) No break in interest rates to refi
2) Higher gas prices
3) Job losses...11.5% rate in California
4) Working less hours..less income


The consumer has seen his mortgage rates go up and their main asset their house drop. The administration and congress and all the honks and experts say will recover. I say if that is true Where is the Love??

Bottom line is that there is nothing that tells us this thing is going to recover other than the "expert" telling us that it is. If they are wrong the market is 50% over priced. The most overpriced stocks are oil gold and the commodities if we don't recover.


What are the experts telling us to buy Gold or stocks and sell bonds. Hey that's a great idea except THE WORLD ECONOMY IS GOING TO HELL right now. These same experts told us not to buy bonds in 2007 and told us to do what?...Buy Gold, the stock market and commodities.

That is all I have today no new positions.


The beat goes on ...Mikey
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