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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, August 4, 2009

Prolonging the inevitable

DJIA 9292 +6.85 SPX 1002.33 -.33 VIX 25.21 -.35 Gold 965.30 +8.30 Silver 14.60 +.34 Oil 70.73 -.85 RBOB (Whsl Gasoline)2.05 -.02 Dollar Index 77.88 +.13 EURO 1.4393 -.0006 (Long Term Gov Bonds 92.07 -.97 IEF (7-10 Yr Gov Bonds 89.56 -.38 XLK (Tech Index) 19.87 -.09 XLE (Oil Index)51.67 -.25 XLF (Financials index)13.62 +.28 EEM (Emerging Markets)36.75 -.37 FXI (China Index)42.75 -.81


Consumers opened their wallets and pocketbooks a bit more in June, increasing their spending for the second straight month while saving less, even as incomes fell sharply.

Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. Many economists warned that despite the slight increase in June, falling wages and rising unemployment likely will keep spending sluggish for the rest of this year.

Still, the housing market continued to show signs of life as pending U.S. home sales rose in June for the fifth straight month, according to the National Association of Realtors. The group's pending home sales index rose more than expected to 94.6, from an upwardly revised reading of 91.3 in May. The last time there were five straight monthly gains was July 2003.

The Commerce Department said Tuesday that consumers boosted their spending 0.4 percent in June, slightly ahead of analysts' estimates. That comes after spending rose 0.1 percent in May.

Personal income fell 1.3 percent, the steepest drop in more than four years. Incomes rose by the same amount in May, boosted by one-time payments from the government. Economists expected personal incomes, the fuel for future spending, to fall 1 percent.

Incomes benefited in May from a one-time payment of $250 that was mailed to 50 million Americans receiving Social Security and other government benefits, as part of the Obama administration's $787 billion stimulus package.


Wages and salaries fell 0.4 percent in June from May, the eighth straight monthly drop. That makes it unlikely consumers will ratchet up their spending anytime soon, economists said.

"The U.S. consumer will not be much of a help during the early stages of the economic recovery," Joshua Shapiro, chief U.S. economist at consulting firm MFR Inc., wrote in a note to clients.

Amid the longest recession since World War II, the personal savings rate has surged as Americans seek to rebuild their nest eggs after home values and stock portfolios plummeted last year. While saving can be good in the long run, rapid increases in saving can slow the economy.

The department said the personal savings rate fell to 4.6 percent in June, after jumping to 6.2 percent in May, which was the highest since February 1995. The rate dropped as low as 1 percent last year.

Spending may increase in July and August due to the government's "cash for clunkers" program, which has spurred thousands of Americans to trade in old cars for newer vehicles, Shapiro said. But the savings rate is likely to keep rising later this year.

Investors appeared unfazed by the economic report and focused on locking in some profits after a 14 percent climb in stocks since July 13. The Dow Jones industrial average lost about 15 points in morning trading, and broader indices also dipped.

The department also revised its spending and income data back to 1929, as it did last week when it reported second-quarter gross domestic product, the broadest measure of the economy's output. The changes show that Americans saved slightly more than previously thought.

For example, the department revised the savings rate in 2008 to 2.7 percent from 1.8 percent.


More borrowing less income. Add government checks and you have the recovery. No jobs though. This is going to turn into a welfare state where the emperor has no clothes. Party now but at some point you have to pay for it.

Still no new trades now going on 3 weeks. Just waiting them out as they do their thing.

The beat goes on ....Mikey
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