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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 9, 2010

Here comes the rally

DJIA 9985 +77.24 SPX 1061.83 +5.09 Russ2000 590.62 +4.13 NASDAQ 2135.26 +9.31 VIX 25.94 -.57
Dollar Index 80.16 -.28 Aussie Dollar (FXA) .8728 +.0078 EURO(FXE) 1.37 +.0063
TLT(20yrGov Bonds) 92.12 +.029 IEF (7-10Gov Bonds)90.70 -.06
XLK (Tech)21.09 +.11 XLE (Oil Index)54.67 +.93 XLF (Finan Index)13.67 uch
XHB Homebuilders Index)15.18 +.01 GDX (Gold Miners Index)41.74 +.97
XLB (BasicMatIndex) 30.30 +.32 EEM (Emerging Markets)37.50 +.67 FXI (China Index)37.90 +.73
Gold 1075.30 +9.10 Silver 15.24 +.175 Copper 2.9425 +.129 Oil 72.51 +.59 RBOB (Whsl Gas)1.8953 +.0013

Bear market rallies are very sharp and designed to run the shorts and give the longs hope. The target will be just above the 50 day at about 10300.
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