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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

Monday, September 21, 2009

Weakness emerging in Pound, Euro Gold Miners

DJIA 9777 -42.85 SPX 1063.33 -4.97 VIX 24.28 +.36 Gold 1005 -5.70 Silver 16.92 -.145Oil69.33 -2.71 RBOB (Whsl Gasoline)1.75 -.08 Dollar Index 76.98 +.31 EURO 1.4673 -.0047 (Long Term Gov Bonds) TLT 96.17 +.41 IEF (7-10 Yr Gov Bonds)91.40 +.22 XLK (Tech Index)20.84 -.05 XLE (Oil Index54.48 -.70 XLF (Financials index)14.99 -.15
XHB (Homebuilders Index)15.93 -.16 EEM (Emerging Markets)38.61 -.42
FXI (China Index)42.81 -.55 GDX (Gold Miners Index) 44.74 -1.17


The game seems to be trash the dollar and pump up equity. The GDX seems to be a leader in this story as it turned down from its highs on 9/17 and has pulled back a cool 10%. I now see the Euro and the market showing the same kind of weakness that the Gold Miners did near the top. That index hit its 20 day today lets see if the rest follow that lead.

Shorted EWZ (Brazil Fund ) today at 65.26

The beat goes on ...Mikey
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