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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

Thursday, July 23, 2009

Better than expected rally continues...We are close to a top

DJIA 9070 +189 SPX 977 +22.96 VIX 23.78 + .36 Gold 951.20 -2.10 Silver 13.76 +.06
Oil66.92 +1.52 RBOB (Whsl Gasoline) 1.91 +.08 Dollar Index 78.95 +.09 EURO 1.42 -0005(Long Term Gov Bonds)91.17 -1.54 IEF (7-10 Yr Gov Bonds)89.87 -.90 XLF (Tech Index)19.80 +.41 XLE (Oil Index)50.59 +1.66 XLF (Financials index) 12.50 +.36 EEM (Emerging Markets)35.62 +1.32 FXI (China Index) 42.26 +1.84

Dow Soars Past 9,000 as Investors Cheer Earnings

Stocks rallied Thursday as investors shrugged off a rise in jobless claims and focused on encouraging earnings from Ford and 3M.

A third straight rise in existing-home sales also buoyed the market, helping propel the Dow Jones Industrial Average above the 9,000 mark for the first time since January.

Yes its all good with the better than expect rally "breaking out" to a new recovery high above 9000. This tells everyone that price is confirming the recovery story. It must be true. They preped this thing for the last 2 months and now the price confirmation...here we go. The problem is it is not about earnings. There is no income to support this and this rally is doomed.

I will be shorting some time very soon will let you know.


The beat goes on ....Mikey
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