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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

Thursday, March 4, 2010

Jobs Tomorrow

DJIA 10412.40 +15.64 SPX 1119.15 +.36 Russ2000 649.22 NASDAQ 2282.38 +1.70 VIX 19.16 +.33 Oil VIX 34.07 -.46

Dollar Index 80.65 +.68 Aussie Dollar(FXA) 89.99 -.61 EURO(FXE)1.3559 -.0134 Yen 89.14 +.68 Brit Pound 1.5018 -.0098

TLT(20yrGov Bonds)91.34 +.35 IEF (7-10Gov Bonds)90.66 +.15

XLK (Tech)21.95 +.009 XLE (Oil Index)56.90 -.48 XLF (Finan Index)14.89 +.11 XHB Homebuilders Index)16.17 -.15 GDX (Gold Miners Index)45.44 -.924 XLB (BasicMatIndex) 32.63 +.10 XRT (Retail Index)

EEM(Emerging Markets) 39.88 -.25 FXI(China Index) 40.10 -.67 IEV(Europe350)36.87 -.15(Brazil)70.48 -.10

Gold 1132 -11.30 Silver 17.13 -.199 Copper 3.365 -.0700 Oil 80 -.87 RBOB (Whsl Gas)2.2272 -.0204 Nat Gas 4.563 -.194



The market is hovering just below the "breakout level" of 1125 on the S&P. The reason they are calling 1125 a breakout is that the S&P reversed a breakdown at 1120 on 1/22. We have rallied back up to that breakdown and it has been in this area for the last 3 days. A break above this area will force the players to make a decision. The longs will add and the shorts will cover.

I hear the experts hyping EVERY group now. I am hearing alot of reccos on the emerging market, the commodities and the retail sector. They are worried about the jobs number tomorrow. I would like to see the trading range resolved to the upside so they can put a stake in the shorts heart. As always after a reversal of this spike would be a signal to add to my shorts. Still premature to do anything now.

I have also have heard that if the market sells off with the employment numbers that it is a buying opportunity. I will go with weakness below 10200.

Mikey
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