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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, December 2, 2009

Magic..Turning Deflation into Inflation

How do you convince the public that there is inflation when a deflation is going on?

1. You tell them that the Fed is printing new dollars and convince them that this will be going on a long time. you keep telling them this story for months and months and put it in the news everyday.

2. You fix the price of Gold at a nominal new high everyday for months. Hey if Gold is going up there must be inflation..right?

3. You put the word out to your stooges (investment advisers) to sell this story hard to the public investor.

4. You chum the water with free sardines and let the fish eat all they want everyday. In other words, anyone who buys this story gets to make easy money quickly.

5. You tell the story that the market sees the future and is going up because the MARKET KNOWS what is going to happen and discounts it in advance.


All the while asset prices decline and loans and Banks keep blowing up. The jobs market continues to collapse. Public sector jobs start to be cut and States become insolvent. That is deflation and deleveraging, not inflation but the Wizard can control the economic stats, the Market and Commodity prices in the short run.

Just ask any one if there is going to be inflation and they will tell you without hesitation that inflation is coming. That is what the Wizard is all about. In the end the economy wins out and the public is left holding the bag.

Mikey
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