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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 16, 2010

When all else fails, play the buy out card

Simon Property Group made what it called a $10 billion offer for General Growth Properties that would end one of the largest U.S. bankruptcies on record and combine the two largest U.S. shopping mall owners.

Simon [SPG 74.25 2.25 (+3.13%) ], the largest U.S. real estate investment trust, said Tuesday that it would offer $6 per share, or roughly $1.9 billion, plus a stake in property assets it valued at about $3 per share.

Simon controls about 15 percent of the malls in the U.S., according to Bank of America. General Growth controls about 14 percent.

General Growth shares [GGWPQ 11.85 2.45 (+26.06%) ] leaped more than 20 percent Tuesday.

Simon expects the transaction to add to its funds from operations, a key profit measure for a real estate investment trust, in the first year after closing.

General Growth's official unsecured creditors committee supports the offer, Simon said in a statement.

The offer would provide a 100 percent cash recovery of par value plus accrued interest and dividends to all General Growth creditors, an amount totaling about $7 billion.


General Growth declared bankruptcy in April with 158 of its 200-plus malls after trying for months to refinance its debt. It listed total assets of $29.56 billion and total debt of $27.29 billion.

The Chicago-based company, the second-largest U.S. mall owner, owns such valuable properties as South Street Seaport in New York and Fashion Show in Las Vegas.

Indianapolis-based Simon owns or has an interest in 382 properties comprising 261 million square feet of leasable space in North America, Europe and Asia. These include such well-trafficked malls as Roosevelt Field on New York's Long Island and Sawgrass Mills Circle near Fort Lauderdale, Florida.

The transaction is not subject to a financing condition. Simon plans to finance it with cash on hand, existing credit facilities and equity investments in the acquisition by institutional investors.
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They will try to say that this purchase just means that the commercial real estate market is cheap and bottoming. The fact remains that the consumer is getting choked by the banks and there has been nothing to help them. In the beginning of 2007 there were a number of buy outs that "valued" the properties higher take a look at the IYR in early 2007.

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