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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, September 4, 2009

Bad Number market rally

DJA 9440 +96.05 SPX 1016.38 +13.14 VIX 25.12 -1.98 Gold 993.20-4.50 Silver 16.25 -.45 Oil 67.76 -.20 RBOB (Whsl Gasoline)1.77 -.03 Dollar Index 78.18 -.34 EURO 1.4303 .0055 (Long Term Gov Bonds) TLT 85.12 -1.74 IEF (7-10 Yr Gov Bonds)91.21 -.54 XLK (Tech Index)20.03 +.29 XLE (Oil Index) 51.04 +.78 XLF (Financials index)14.21 +.15 XHB (Homebuilders Index)15.03 +.24 EEM (Emerging Markets)36.36 +.65 FXI (China Index)41.12 +1.44

The market rallied on a bad jobs numbers today. Bullet proof. It is for now but part of the topping process. Will wait until I get a sell signal. Gold seems much closer to a selloff than the market. The public is long gold and not afraid of the selloff...they feel safe and look at it as a long term hold...a recipe for disaster. They are still concerned about the market. I put on a short position on the GDX the Gold miners index at 45.07 today.

I would think that the market will not top until we have a here we go rally that breaks out...kinda like Gold is getting now. Waiting for a reversal on GDX before I hit it heavy.

Have a great labor day weekend and be good to each other

The beat goes on...Mikey
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