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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

Friday, February 5, 2010

Europe takes the fall for this sell off.

Problems in Europe is being blamed for the sell off in the DJIA. What is not being blamed is the US economy. The Dollar is rallying as the crisis in Europe broadens.

They are telling us the part of the strength in the dollar is the recovering US economy. That is a bogus story. The truth is that the European economy is falling faster than ours because they sat on their hands when the problems surfaced in Sept 2008.

They are the one's that will be printing money now and we are the responsible ones now. Remember the FED stopped the special liquidity on Feb 1st and by coincidence Volker showed up in front of congress to kick bank booty this week. In other words. no more freebie trades now.

The employment numbers are a hoax and it is easy to see it. The "hedge funds" can't rely on Uncle Sugar now and so the market has to deal with reality, whether they own up to it or now.

Mikey
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