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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, July 8, 2009

Commodities Complex Breaking down..Gold breaks Int Uptrend as CNBC touts Dollar weakness

DJIA 8132 -40 SPX 873 -7.43 VIX 32.36 Gold 909.50 -19.60 Silver 12.81 -.40 -10 Oil 60.74 -2.19 RBOB (Whsl Gasoline) 1.6685 -.066 Dollar Index 81 +.13 EURO 1.3845 -.0066 (Long Term Gov Bonds)95.66 +.91 IEF (7-10 Yr Gov Bonds)91.46 +.39 XLF (Tech Index)17.22 -.12 XLE (Oil Index)43.86 -.66 EEM (Emerging Markets)30.50 -.61 FXI (China Index)36.20 -.61

If you are following the price data a the top of each post it shows considerable weakness in the commodities and equities markets and strength in the bond markets. The next thing to happen is the dollar will take off. CNBC is running a piece on dollar weakness today as it is weak against the YEN. If you look at the dollar index it is showing strength particularly against the EURO the Pound and the Aussie dollar. They are the beneficiaries of stronger commodities the Yen and the Dollar are the beneficiaries of weaker commodities.

This is clearly an attempt the mask the emerging strength of the dollar. As this is all happening Gold is breaking below its intermediate uptend. The market message is clear the economy and the equities markets and commodities are breaking down and they are touting dollar weakness.

Don't be fooled It's Showtime

Bought DZZ(Gold Short) @ 22.02


The beat goes on ....Mikey
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