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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 25, 2009

They are not showing you Nat Gas and Gasoline prices collapsing

What if I told you that Natural Gas prices are lower than they were in 2003 and wholesale gasoline prices topped on August 3rd at 1.95 and are 1.62 today. The retail price at the pumps has not fallen because the oil companies are dragging their feet. The longer they hold up the price the smaller the demand is and the lower the price will go. This is what is happening to the consumer at the stores. The retailers are not passing along the decreases and this in turn is slowing demand. They are all thinking things will be like they used to be but I call it denial and the Fed is bringing alot of it on with their "economy is bottoming" story

That is the true measure of strength and weakness in the economy not the were bottoming BS we hear from the Fed.
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