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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

TLT (Long Term Governments) make a 4 month high

DJIA 9648 -58.80 SPX 1042 -8.11 VIX 26.26 +1.31 Gold 991 -7.90 Silver 16.10 -.195RBOB (Whsl Gasoline)1.62 -.02 Dollar Index 76.98 -.135 EURO 1.4672 .0019 (Long Term Gov Bonds) TLT 97.64 +.86 IEF (7-10 Yr Gov Bonds)92.09 +.28 XLK (Tech) 20.57 -.14 XLE (Oil Index)53.23 -.40 XLF (Financials Index)14.54 -.19 XHB (Homebuilders Index)14.85 -.39 EEM (Emerging Markets)37.92 -.01 FXI (China Index)41.02 -.18 GDX (Gold Miners Index) 42.85 -.88


Long term Government bonds (TLT) are at a 4 month high now trading at 97.64. That does not make any sense if you believe their story. It does if you follow this blog. I will only refer you to my comments on the Fed and the bond market since my call to buy the bonds on Aug 24th.

Of course the Fed is tightening and not printing as the tout would have you believe. They are putting money in the bond market and withholding it from the economy and the consumer. Just watch the bonds that will tell you what they are doing.

The stock market is now showing some emerging weakness along with strength in the dollar. I think this dollar strength makes more sense if you know they are not printing but tightening. Every yahoo is now short the dollar and long Gold and stocks and looking to buy pullbacks or short run ups in the dollar.

That is just where the Fed wants them.

By the way a note of interest is that wholesale gasoline has dropped a cool 32 cents in the last 3 weeks. The retailers have not chosen to drop the price yet, however.

The beat goes on.....Mikey
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