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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, February 24, 2010

MACD at the zero line

DJIA 10366 +83.67 SPX 1103 +8.63 Russ2000 630.35 +5.27 NASDAQ 2234 +21.19 VIX 20.71 -.66 Oil VIX 34.18 -.70
Dollar Index 80.55 -.36 Aussie Dollar(FXA) 89.29 EURO(FXE)1.3579 +.0070
TLT(20yrGov Bonds) 90.82 +.35 IEF (7-10Gov Bonds)90.24 +.06
XLK (Tech)21.73 +.22 XLE (Oil Index)55.98 +.34 XLF (Finan Index)1414.58 +.20
XHB Homebuilders Index)15.66 -.08 GDX (Gold Miners Index)42.71 +.21 XLB (BasicMatIndex) 31.72 +.08
EEM(Emerging Markets) 38.84 +.33 FXI(China Index) 39.22 +.57 IEV(Europe350)36.15 +.33EWZ(Brazil) 67.59 +.27
Gold 1098 -4.90 Silver 15.875 -.013 Copper 3.2450 +.0135 Oil 79.74 +.88 RBOB (Whsl Gas)2.0744 Nat Gas 4.869 +.091

The MACD is up to the zero line and they have killed the Feb puts. I need the MACD to roll over and the market to trade below the 50 and 20 day now. The 50 day is at 10373 and the 20 day is at 10197. Therefore, a close below 10197 would put the DJIA in a sell mode. The next object would be near the 200 day which is at 9600.


Stocks to watch:

Visa (V) Showing weakness in a up market just under the 50 day. This stock has been highly touted over the past 2 weeks.
Gold (GLD) Showing relative weakness with dollar up below 50 day just above 20 day at 107.28 close below day 20 puts it in downtrend
Apache (APA) same chart and comments as Gold
Gold Miner (GDX)below both 20 and 50 day resuming downtrend
The Shack (RSH) breaking under 20 and 50 after earnings news this stock has been highly touted
Aussie Dollar (FXA) weakening after a move to the 50

This rally today looks real weak to me.

Mikey
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