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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 12, 2010

What a Mess..A buying opportunity?....Santa Maria!!!!

DJIA 10087 -57 SPX 1074.54 -3.93 Russ2000 606.88 +1.40 NASDAQ 2180.13 +2.72
VIX 23.80 -.16
Dollar Index 80.49 +.49 Aussie Dollar(FXA).8883 -.0035 EURO(FXE)1.3599 -.0059

TLT(20yrGov Bonds) 90.11 +.29 IEF (7-10Gov Bonds)90.12 +.29

XLK (Tech)21.38 +.06 XLE (Oil Index)55.53 -.07 XLF (Finan Index)13.90 -.04
XHB Homebuilders Index)15.82 +.06 GDX (Gold Miners Index)43.57 -.41
XLB (BasicMatIndex) 30.97 -.08

EEM(Emerging Markets) 38.51 -.42 FXI(China Index) 38.95 -.73 IEV(Europe350)35.48 -.43EWZ(Brazil) 66.42 -.51

Gold 1091.40 -3.3 Silver 15.49 -.10 Copper3.083 -.0685 Oil 73.86 -1.42 RBOB (Whsl Gas)1.9168 -.0189


Global markets have been shaken in recent weeks by concerns that debt trouble in countries like Greece, Portugal and Spain would unravel a budding global economic recovery. And David Hefty, chief executive of Cornerstone Wealth Management, told CNBC that Europe’s sovereign debt issues are just beginning.

“When you look at what’s going on right now with the PIIGS [Portugal, Italy, Ireland, Greece, Spain]—that’s just the tip of the iceberg,” Hefty said.

“When you go to the larger economies in Europe—Germany’s total debt to GDP is over 170 percent, France is over 230 percent and UK is over 400 percent.”

During the Asian debt crisis in 1997, Hefty said the Asian countries only had around 160 percent total debt-to-GDP, making them look like “fiscal conservatives” compared to the European nations today.
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Look at this article...Remember what they said about Dubai

The tremors from Europe and China are sparking selloffs in stocks, but the turmoil could be setting up the US market for a strong buying opportunity, strategists say.

Stocks have wobbled through much of 2010, thanks in large part to worries about the debt crisis in Greece and other members of the European Union as well as China's recent efforts to slow its rapidly growing economy.

As those developments have prompted some nervous investors to sell stocks and lock in profits, others have moved in to take advantage of the market dips.

"It's just an excuse to take some money off the table," Michael Cohn, chief investment strategist at Global Arena Investment Management in New York, says of market drops like Friday's. "There are going to be these fits and starts. We had the rise off the panic bottom but we're still in a long-term bear market. Until the bear market is over the market is going to chop around."

Wall Street is coming off a 60 percent rally from the March lows that showed no signs of stopping. Investors disregarded rising unemployment, weak earnings and a generally dismal outlook to snap up stocks and rebuild cash-laden risk-averse portfolios.

Tremors like the debt crisis in Greece and the unexpectedly rapid moves in China to increase capital requirements for banks have rattled the markets in a way that global moves could not during the rally.

The result has been some fairly steep sell-offs that some portfolio managers have been using to scout out value.

"With new money coming into clients' accounts we're dollar-cost averaging on these kinds of dips," Larry Rosenthal, president of Financial Planning Services, said in a CNBC interview. "I think it represents a wonderful buying opportunity."

Dollar-cost averaging entails investing consistent amounts in the market over intervals; during a market drop buying more of a certain stock would lower the price point an investor would need to break even.(Just in case you don't know what that means)

The strategy could be especially important at a time when the market seems to lack direction.
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We are in serious trouble and it is not just in the US or Europe. The buzz word here is cheap. In the stock market, when stocks get cheap they will usually get cheaper. Not until they become scary do they bottom. Dollar cost averaging is a very very long term process. We are in a bear market and rolling off of the first bounce. Not a place to buy. Short term we probably rally
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