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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, July 7, 2009

Aussie Dollar...Euro look real toppy...Techs break

DJIA 8223 -101 SPX 887 -11 VIX 29.47 Gold 922.90 -1.40 Silver 13.13 -10 Oil 62.85 -1.20 RBOB (Whsl Gasoline) 1.7275 -.0129 Dollar Index 81.81 +.12 EURO 139.42 -.008(Long Term Gov Bonds)94.50 + .34 IEF (7-10 Yr Gov Bonds)90.98 +.36 XLF (Tech Index)17.49 -.28 XLE (Oil Index)44.71 -.98

The commoditites and market sell off continues. The sell off is spreading into the Techs. The Currencies Aussie dollar which is just a play on Gold and the Euro which is more of a Petro currency are showin signs of topping and I would not be surprised to see them get clocked soon. Gold is still clinging on to is suopport but I believe it has the same fate as the rest of them.

The Market SPX looks like it should trade to the 90 day which is at 856 now. I woul expect some kind of bounce from there.
Added XLF the SPDR Tech index and the XLE The SPDR oil index to the mix at the top today. Both are industry group stock indexes. You can follow thes now expect them to take out their lows at some point. The low on the XLK is 13.08 and the low on the XLE is 37.40. So you would figure about 20 to 25% room on the downside from here.

Shorted JCP @ 26.79 Trends Long Term ...Down.... Intermediae Term UP
Short term ...Down


The Beat goes on ....Mikey
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