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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, November 12, 2009

The Wizard Plays the Buffet and Gates card

DJIA 10200 SPX 1087.24

How do you convince people that these prices are a bargain? How do you get people to be bullish on America when the economy is going into the tank. If you are the Wizard you have Becky Quick interview Bill Gates and Warren Buffet on CNBC for an hour and have them spout off how Great a country this is.

For this reason I will say that I think this is it. The Wizard has pulled everything out of his bag of tricks. After this act I suspect everyone will be just like Bill and Warren and buy the pullback.

My bullshit meter is exploding through the top of the scale.

Mikey
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