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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, October 7, 2009

A close below 9400 should seal the deal

DJIA 9697 -33 SPX 1054 -.58 VIX 24.83 -.87 Gold 1044 +4.30 Silver 14.79 +.195 Oil 69.63 -1.25 RBOB (Whsl Gasoline)1.72 -.05 Dollar Index 76.68 +.185 EURO 1.4666 -.0043 (Long Term Gov Bonds) 99.23 +1.23 IEF (7-10 Yr Gov Bonds)92.46 -.49XLK (Tech)20.71 -.08 XLE(Oil Index)54.55 +.17 XLF Financials Index)15.00 +.07 XHB (Homebuilders Index)14.46 -.23 EEM (Emerging Markets)39.24 -..14 FXI (China Index)41.94 +.41 GDX (Gold Miners Index)47.69 +.11


The market is trading tick for tick with the EURO. The EURO goes up and the market goes up. The EURO goes down and the Market goes down. It has deteriorated into a commodity play. The economy at this point has nothing to do with the daily swings. Then along comes every expert in the world and tells us that the dollar is going to hell in a hand basket. I guess you could put 1 and 1 together and figure out which way the market is going to go if you knew that the dollar was going to keep going down.

If you read this blog you know that when 1+1=2 keep your head down. It equals 2 big time now and that is dangerous for the longs. We could continue to play this game a bit longer but what we want to look for is a change in trend that is different than their story. I will say to me this change will come if the DJIA closes below 9400 and the EURO closes below 144.

I do not think at this point this they will change their story and that the crowd which has been trained to buy the pullback will do so. If they do then this thing has had it. I will add on to my shorts if that happens.


The beat goes on...Mikey
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