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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

Friday, August 28, 2009

Cramer says "Buy the dips"..Now that's more like it!

DJIA 9553.49 -26.61 SPX 1030.56 -.19 VIX 25.03 +.75 Gold 958.90 +11.60 Silver 14.81 +.5850 Oil 73.22 +.73 RBOB (Whsl Gasoline)1.91 +.02 Dollar Index 78.04 -.01 EURO 1.4366 -.0006 (Long Term Gov Bonds) TLT 96.25 +.08 IEF (7-10 Yr Gov Bonds) 91.28 +.16XLK (Tech Index)20.33 +.12 XLE (Oil Index) 52.09 -.19 XLF (Financials index)14.75 +.02 XHB (Homebuilders Index) 15.82 +.04 EEM (Emerging Markets)36.13 -.08 FXI (China Index)40.07 -.23


Cramer yesterday says to buy the Dips. He says the strategy has worked from the March lows and to stay with it. He said it worked yesterday when the market was down 91 and it closed up 37. He said "One of the factors that have been buoying the market is fund managers’ desperate scramble for stocks. They found themselves heavy on cash but light on equity as the market turned up, and now they’re buying stocks en masse to keep pace with their benchmark indexes. As a result, any price weakness lures them in, which puts a floor in and prevents a sell-off."
“So I have said take advantage of their panic, get in there ahead of them and buy,” Cramer said. “It’s been the surest strategy going.”



In any good con game the players are given a "strategy" that has worked in the past and is working now. The players are told that time is important and they have to act quickly.

The players invests more money as the strategy continues to work. Cramer is working a con and it is like throwing bait over to hungry fish. Well of course there is no free lunch and at some point the hook is on the bait.

The fish are eating it up now but the hook is coming. The question is when? The closer to the end we are the easier it is to make money and it is pretty easy to make money now, Cramer is telling us that now ..“So I have said take advantage of their panic, get in there ahead of them and buy,” Cramer said. “It’s been the surest strategy going.”


Cramer is right about one thing...the managers and the public are also starting to buy and have been doing so for the past 3 weeks. They want as much money coming at this thing as they can get before they pull the plug. That is the one reason I am waiting but in the end this thing is going to take out the lows. I think the shorts are gone and sentiment is bullish now. Its, now not about the fundamentals it is about price and as I say the fish are taking the bait.

Mikey
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