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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, February 23, 2010

The "Recovery" Continues Consumer Confidence at 10 month low

DJIA 10317 -66.28 SPX 1097.96 Russ2000 624.23 -8.02 NASDAQ 2212 -29.14 VIX 21.13 +1.19 Oil VIX 34.76 +1.08
Dollar Index 80.81 +.23 Aussie Dollar(FXA) .8955 -.0062 EURO(FXE)1.3544
TLT(20yrGov Bonds) 89.93 +.83 IEF (7-10Gov Bonds)89.99 +.49
XLK (Tech)21.51 -.26 XLE (Oil Index)55.83 -.74 XLF (Finan Index)14.50 -.14
XHB Homebuilders Index)15.86 -.29 GDX (Gold Miners Index)42.72 -1.38 XLB (BasicMatIndex) 31.77 -.38
EEM(Emerging Markets) 38.86 -.58 FXI(China Index) 38.91 -.25 IEV(Europe350)35.93 -.66EWZ(Brazil) 67.66 -.57
Gold 1106.7 -6.40 Silver 15.93 -.287 Copper 3.2365 -.092 Oil 79.30 -1.01 RBOB (Whsl Gas)2.09 -.023 Nat Gas 4.82 -.069

In a government of the corporations, by the corporations, for the corporations the word recovery means "better than expected earnings". That message has been liberally used in the past 10 months to describe a corporate recovery that has not included the "consumer". The "consumer" is just a buzz word for the citizens of this country. The consumer is also 70% of the economy. Today's reading in consumer confidence and a Gallup poll on employment measure the real economy and highlight the disconnect between the government and its citizens.


Consumer Confidence Falls to 10-Month Low in February

U.S. consumer confidence fell in February to the lowest in 10 months, as consumers' short-term outlook for the jobs market worsened, according to a private report released Tuesday.

The Conference Board, an industry group, said its index of consumer attitudes fell to 46.0 in February from a revised 56.5 in the prior month. February's reading is the lowest since April 2009.

The median of forecasts from analysts polled by Reuters as for a February reading of 55.0. The expectations index fell to 63.8 from 77.3. The present situation index dropped to 19.4 from 25.2 in January, the worst since February 1983.

"Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years," said Lynn Franco, director of The Conference Board Consumer Research Center.

Consumers' labor market assessment worsened. The "jobs hard to get" index rose to 47.7 percent from 46.5 percent, while the "jobs plentiful" index fell to 3.6 percent in February from 4.4 percent in January.

Nearly 20 percent of the U.S. workforce lacked adequate employment in January and struggled to make ends meet with reduced resources and bleak job prospects, according to a Gallup poll released Tuesday.


In findings that appear to paint a darker employment picture than official U.S. data, Gallup estimated that about 30 million Americans are underemployed, meaning either jobless or able to find only part-time work.

Underemployed people spent 36 percent less on household purchases than their fully employed neighbors in January, while six out of 10 were not hopeful about their chances of finding adequate work in the coming month, the poll said.

Gallup surveyed more than 20,000 U.S. adults from Jan. 2 to 31. The results have a 1 percentage point margin of error.


The U.S. unemployment rate fell to 9.7 percent in January but remains near record highs. The poll's estimate of U.S. underemployment is higher than official statistics. The Labor Department says 16.5 percent of American workers were without employment or worked part-time for economic reasons in January against Gallup's 19.9 percent.

A Labor Department official said the government rate may be lower because it factors out temporary seasonal changes in employment to better reflect the underlying economy.
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