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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

Thursday, October 8, 2009

Putting lipstick on a pig

DJIA 9817 +98.90 SPX 1069 +11.48 VIX 24.11 -.57 Gold 1055 +11.20 Silver 17.79 +.29 Oil 71.47 +1.90 RBOB (Whsl Gasoline)1.77 +.056 Dollar Index 76.14 -.52 EURO 1.4772 +.0104 (Long Term Gov Bonds) 99.37 +.18 IEF (7-10 Yr Gov Bonds)93.08 +.03 XLK (Tech)20.91 +.16 XLE(Oil Index)56.01 +.17 XLF Financials Index)15.26 +.17 XHB (Homebuilders Index)15.14 +.59 EEM (Emerging Markets)39.81 +.47 FXI (China Index)42.87 +.85 GDX (Gold Miners Index)49.15 +1.29


Here is a summary of Alcoas great earning report:

The maker of aluminum products and component of the Dow Jones Industrial Average reported a surprise profit of 4 cents a share in the third quarter, excluding one-time items, compared with a profit of 37 cents a share in the same period last year.

Analysts surveyed by Thomson Reuters expected Alcoa to report a loss of 9 cents a share.

Sales reached $4.62 billion in the most recent quarter, below the $7.234 billion from this time last year, but ahead of analysts' $4.551 billion forecast.

OK earning declined from .37 to .04 and revenue declined from 7.24 billion to 4.62 billion and that is great news? That is putting lipstick on a pig

Also today:
The number of U.S. workers filing new claims for jobless insurance fell more-than-expected to a nine-month low last week, data showed, suggesting the labor market was healing despite a setback in September.

Initial claims for state unemployment benefits dropped 33,000 to a seasonally adjusted 521,000 in the week ended Oct. 3, the lowest level since early January, the Labor Department said on Thursday.

Analysts polled by Reuters had forecast new claims slipping to 540,000 last week from a previously reported 551,000. A Labor Department official said seasonal factors expected a decline in new claims at the end of a quarter and a rise at the start of a new quarter.

So the analysts had expected 540000 and got 521000. Those are numbers that scream recovery? Again putting lipstick on a pig.

I can hardly wait for the "much better than expected" GDP numbers and all of the rest of the better than expected earnings to come in.

The beat goes on ....Mikey
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