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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, August 5, 2009

The truth about yesterday's numbers...Consumers spent more in June because prices rose

DJIA 9235.55-84.71 SPX 997.06 -8.59 VIX 25.66 +.77 Gold 963.40 -9.00 Silver 14.68 -.15 Oil 71.13 -.29 RBOB (Whsl Gasoline)2.03 -.03 Dollar Index 77.77 -.11 EURO 1.4395 -.0006 (Long Term Gov Bonds 92.41 +.12 IEF (7-10 Yr Gov Bonds 89.88 +.208 XLK (Tech Index) 19.67 -.23 XLE (Oil Index510.10-.73 XLF (Financials index)13.80 +.19 EEM (Emerging Markets)36.05 -.73 FXI (China Index)41.37 -1.42

The truth about yesterdays "good" numbers on consumer spending is that they spent more in June because the prices of food and energy were rising and not because they were ready to spend freely again. Personal incomes sagged as employers continued to cut wages and reduce working hours. The personal savings rate, which had been rising, dropped sharply from the month earlier as one time transfer payments from the government stopped arriving in people's bank accounts. Enough said.


This appeared in yesterday's news:

GE to pay 50 million fine in SEC accounting case. It turns out that GE violated securities laws between 2002 and 2004. The SEC said the changes helped GE maintain a string of earnings that beat Wall Streets "expectations" from 1995 to 2004. This is a common practice of if you don't have the earnings make them up. Remember Enron...well they all do it. It is interesting that it took them 5 years to figure out something that everyone knew then. Oh jeez it took them 5 years to figure out Bernie Madoff.

Things continue to deteriprate in the economy now. The lies continues but in the end the truth comes out.

No new trades today, The beat goes on...MIkey
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