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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 18, 2009

Cramer says sell Bonds...Why???

Nobody cares about bonds ...right. Well if you are the treasury or the Fed you do. That is the way they make their money. They trade the bond market.

The last 4 weeks the treasury has sold tons and I mean tons of bonds. This is at a time when the Gold market is "breaking out" and the dollar is "breaking down". Who in their right mind would buy these bonds. That's right the Fed and their buddies the banks. That is how they make their money. The stock market and Gold are just small sideshows designed to frame attitudes about the economy. Once the stock market and Gold frame the attitudes money is moved.

If you look at a chart on the bond they bottomed in June. That is when I sold and that is when the economy rolled over. The bonds always tell the truth. The market and Gold are giving you the opposite opinion. Only the bonds will tell you what is really happening.

How does the Fed and their buddies get the traders and public to sell their bonds and buy inflation hedges and growth in a falling economy. They rally the market and break out Gold. All the time moving the bonds higher. It is all about maintaining a long position in the bonds now and to get sellers coming to them because "the economy is growing." You would get that impression by watching the stock market and Gold now wouldn't you. But in the end when they want to sell their bonds the market and Gold will be on their butts.

The REAL GAME IS IN THE BOND MARKET NOT STOCKS OR GOLD. They are just sideshows designed to bias opinion.

What is the public doing now...They are buying inflation hedges and selling bonds and coming out of their safe hiding places they went into between October and March. They are buying Gold and high yield Corporate and Municipal bonds. Those sellers need the money real bad now because the economy is so bad and the retail system is working overtime in the press and on TV to tell the public what to do.

The public is always wrong and that is what they are doing now and the insiders are selling as much as they can to tide them over for the next disaster which is sure to come.

Now Cramer tells us to sell the bonds. Guess who he works for. More on this in future blogs.


The beat goes on....Mikey
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