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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

Tuesday, October 27, 2009

Short term sell signals on Gold and the Euro

I now have short term sell signals on Gold 1036 -6.80 and the Euro 1.4786 -.0063.
These are lagging the GDX 44 which flashed its signal at 47 last Tuesday. The DJIA has also given a short term sell signal today along with the strength in the Dollar. The Dollar index for all of the negative talk is at 76.45 which is at a 2 week high.

The Transportation average broke last Thursday and is now 9% off of its highs. The DJIA projects to at least 9550 based on what I see now. To this point I don't see any real concern by the street on this move and until we do this move will continue.

The Oil stocks are reporting earnings and are better than expected. The pattern for stocks now is to report "good" earnings and to then sell off hard. I bought ERY 11.50which is triple short oil stocks today.

The beat goes on ....Mikey
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