Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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

Thursday, September 24, 2009

Keep your eye on the TLT

That is the long term government bond market. The index is now trading at 96.86. If this index breaks out above 100 then something is very wrong with their story. The long rates will be starting to cave in. That does not add up, and 1+1 is no longer 2. The same thing happened in reverse in late January as the bonds tanked and their story was one of deflation and financial collapse.

If you have read this blog on a regular basis you know that the Fed is long the Bond market and they want it higher. When they are buying bonds the money supply drops and that is called tightening. So what is really happening now is tightening and not printing as they are telling us. That will lead to a stronger dollar and weaker Gold and commodity prices.

The proof is in the price of the bonds not the market. They want you to focus on the market and come to the conclusion that the economy is growing as they buy bonds and push long rates lower. When they pump it will be when they sell their bonds and they can only do that to willing public buyers. What will make the public buy? A bad economy and falling Gold and commodity prices. That is when the dump their Gold and stocks.


This is a simple game of misdirection that will not make any sense unless you know what the purpose is. The purpose now is to run up the bond market. When I say run up the bond market I mean Government bonds. The corporate bond market especially the High yield and Municipal bond markets will get roasted as credit quality issues come back with the decline of the economy.

I would not rule out the possibility of an unforeseen event occurring to "derail" the economic expansion that is in their words unfolding now. What does that mean? Well, I can't say because I am just an observer in this process. At times like this I have seen this unforeseen event before. Whatever road it takes the outcome is bad.

What happens at the next low? The public hopefully gives up on the stock market and wild horses could not get them to come back into it because they will know that they have been deceived on this rally. That is when we set a solid low.

As a rookie broker I was told don't chase the first rally and that applies to every time frame from 1 hour, to 1 day, to 1 year, and to 10 years. This is the first rally and it will fail because that is the way the game is played.


The beat goes on.... Mikey
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)