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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

Wednesday, September 2, 2009

Gold!!!Gold!!! They found Gold in Hell

Gold 978.30 +21.80

The is an old joke about some stockbrokers sitting around in an office swapping lies when all of a sudden the door slammed open and a man started yelling, They found gold in Hell, They found Gold in Hell!

With that every broker ran out the front door and went straight to Hell. There was an old broker who sat in the back and who never entered the younger brokers discussions. The old broker started to laugh telling the receptionist that that was the oldest rumor in the book and he wasn't going to fall for that.

Several minutes passed and the old broker jumped to his feet and started to run toward the door. The receptionist asked. Where are you going whereas the old broker replied I am going to Hell because there may be some truth to that rumor.


After months of trading sideways Gold is "breaking out" to the upside. CNBC has run several stories touting that move and bring on a Guest, a top flight gold fund manager, that is telling us that September through December are the best months for Gold.

Mikey is itching to short Gold and they found it in HELL. No trades yet but I will chase any reversal of this breakout. My short will come on a trade below 940.
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