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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, September 8, 2009

Gold above 1000 Market breaking out...Oil above 72 ....The economy bottoming....Hold on look at this number

The commodity market is "on fire" the world economy is growing yada yada yada. Look at this number,...Consumer credit fell a mind numbing 21.60 billion in July after falling a revised 15.5 billion in June. Remember I have been harping about the consumer being 75% of the economy and the banks are pulling his credit cards and loans away from him. The "experts know this that is why they are hyping the growth economy. They want out of their commodities Gold and oil and equities.

The Fed and the banks are withdrawing money from the consumer. They are telling us that they economy is bottoming. It is not hard to see what is happening. They want a slowdown but they are talking about a pick up. This talk is about them selling out their long positions and putting the money into bonds. That sets up the next cycle when the pros then hype the depression and the bonds they are buying now are going through the roof.

All part of the game ....The beat goes on..Mikey
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