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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 21, 2009

Bernanke Testifies on the economy...You be the judge

DJIA 8896 +48 SPX 952.72 +1.59 VIX 24.09 -.39 Gold 947.90-.90 Silver 13.55 -.075 Oil 64.81 +.83 RBOB (Whsl Gasoline) 1.81 +.02 Dollar Index 79.08 +
03 EURO 1.4198 -.0027 (Long Term Gov Bonds)93.55 +1.53 IEF (7-10 Yr Gov Bonds)91.31 +.31 XLF (Tech Index)19.28 +.11 XLE (Oil Index)49.70 +.42 XLF (Financials index) 12.16 -.08 EEM (Emerging Markets)34.64 -.13 FXI (China Index)40.69 -.23

Bernanke: Some Improvement, but Economy Vulnerable

Federal Reserve Chairman Ben Bernanke on Tuesday said the outlook for the long-suffering U.S. economy appears to be improving and the U.S. central bank was carefully reviewing ways to withdraw its massive monetary policy stimulus when conditions permit.

Bernanke repeated the Fed's forecast that the economy should start growing again in the second half of this year, but he warned growth would be slight, leading to higher unemployment.

Despite some improvements—including a stabilization in consumer spending and moderating declines in housing activity—the economy remains vulnerable, he said.

"Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending," Bernanke said. "The possibility that the recent stabilization in household spending will prove transient is an important downside risk to the outlook."

The nation's unemployment rate climbed to a 26-year high of 9.5 percent in June. The Fed says it could rise as high as 10.1 percent this year, and stay elevated into 2011. The post-World War II high was 10.8 percent at the end of 1982, when the country had suffered through a severe recession.

Expectations for a lethargic recovery should keep a lid on inflation this year, Bernanke said. With consumers likely to stay cautious amid rising unemployment, companies won't be able to jack up prices.

"The (Fed) believes that a highly accommodative stance of monetary policy will be appropriate for an extended period," Bernanke said in remarks prepared for delivery to the House Financial Services Committee.


"The Fed has zero intention of tightening monetary policy any time in the near future. They want to keep the conditions in place to sustain this fragile economic recovery," said Boris Schlossberg, director for currency research at GFT Forex in New York.
The Fed has cut interest rates to almost zero and doubled the size of its balance sheet to around $2 trillion as it pumped money into the economy to fight a severe recession after a financial panic last year cracked global credit markets.


Some economists, including some policy-makers, have worried that this dramatic expansion of Fed liquidity and lending may have sown the seeds for inflation to blossom as the recovery gains traction.

Bernanke, delivering the Fed's semiannual report to Congress on the economy, took pains to promise the U.S. central bank had an array of weapons at its disposal to withdraw its unprecedented monetary stimulus when the time was right, even if its balance sheet remains large for a time.

Three comments I found interesting:

Expectations for a lethargic recovery should keep a lid on inflation this year, Bernanke said. With consumers likely to stay cautious amid rising unemployment, companies won't be able to jack up prices.

Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending," Bernanke said. "The possibility that the recent stabilization in household spending will prove transient is an important downside risk to the outlook."
The nation's unemployment rate climbed to a 26-year high of 9.5 percent in June. The Fed says it could rise as high as 10.1 percent this year, and stay elevated into 2011. The post-World War II high was 10.8 percent at the end of 1982, when the country had suffered through a severe recession.

So if the consumer is going to be losing his jobs until 2011 and that the recent stabilization in household spending will prove transient and the consumer is 75& of the economy then what kind of recovery are we getting. I get it no recovery.

He is saying no recovery and no inflation. I agree
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