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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, March 24, 2010

Gold slips below 1100 flashes sell signal..Market flying into Danger Zone

DJIA 10844 -44.37 SPX 1168.45 -5.72 Russ2000 686.33 -3.98 NASDAQ 2401.14 -14.11 VIX 17.53 +1.18

Dollar Index 82.04 +.92 Aussie .909 -.0094 Euro 1.3347

TLT(20yrGov Bonds)89.51 -1.42 IEF (7-10Gov Bonds)89.49 -.86

XLK (Tech)23.04 -.13 XLE (Oil Index)57.06 -.28 XLF (Finan Index)15.90 0 KRE (Regional Bank index) 26.66 -.15 XHB Homebuilders Index)16.93 -.01 GDX (Gold Miners Index)43.57 -1.71 XLB (BasicMatIndex) 34.12 -.09 XRT (Retail Index 41.18 -.52

EEM(Emerging Markets) 41.10 -.53 FXI(China Index)40.64 -.60 IEV(Europe350)37.54 -1.68(Brazil)71.56 -1.59

DBC (Commodity Index)23.11 -.20 Gold 1085 -17.90 Silver 16.59 -.43 Copper 3.33 -.047 Oil 80.53 -1.38 RBOB (Whsl Gas)2.22 -.038 Nat Gas 4.109 -.02


Every day is groundhog day. The market is up, the economic statistics make new lows, the experts on CNBC trumpet a bull market and I can count on hearing 25 Gold commercials during the day.

The Gold chart below shows a price break below 1100. The GDX (Miners index) is trading below its 50 day average of 44.39. The MACD is rolling under zero line and the price is under the 50 day average and it is doing it without fanfare. The move above 1100 on 2/16 was touted as a technical plus ..today's sell off reverses that move. The slimy yellow metal is now in sell mode.

The market is still in a buy mode. I am looking at a break of the low of 3/5 as a reversal. That price would be below 10500. That being said I WILL SHORT ON A CLOSE BELOW 10700. I will put a stop on that trade on a close above 10900.

The shorts and the longs will not believe any sell off from this. The market is set up for the kill now

I will buy the BGZ( Large Cap 3X Bear short) The SMN (2X basic mat short) EDZ (3X emerging market short) on a close BELOW 10700.













Adding to ZSL 4.54 and GLL 10.11 today

Mikey
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