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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 3, 2010

A recovery that would make Madoff proud

DJIA 10463 +56 SPX 1125.46 +7.15 Russ2000 653.83 +5.53 NASDAQ 2293.07 +12.43 VIX 18.43 -.63 Oil VIX 35.38

Dollar Index 79.975 -.60 Aussie Dollar(FXA) 90.74 +.0038 EURO(FXE)1.3718 +.0103 Yen 88.60 -.20 Brit Pound 1.5095 +.0126

TLT(20yrGov Bonds) 90.82 -.40 IEF (7-10Gov Bonds)90.36 -.24

XLK (Tech)22.05 +.71 XLE (Oil Index)57.82 +.69 XLF (Finan Index)14.88 +.11 XHB Homebuilders Index)16.34 +.19 GDX (Gold Miners Index)46.79 +1.28 XLB (BasicMatIndex) 32.90 +.65
EEM(Emerging Markets) 40.59 +.52 FXI(China Index) 41.26 +.36 IEV(Europe350)37.26 +.68(Brazil)72.13 +1.56

Gold 1143 +5.60 Silver 17.31 +.246 Copper 3.468 +.0565 Oil 81.05 +1.37 RBOB (Whsl Gas)2.24 +.04 Nat Gas 4.773 +.065

Stocks advanced Wednesday as reports on the services sector and jobs came in better than expected.

The ISM said its gauge of the services sector rose to 53 in February, its highest since December 2007. Economists had expected the gauge to hold at 50.5, where it was in January. Services account for 80 percent of all U.S. economic activity.

Meanwhile, ADP reported the private sector shed 20,000 jobs in February, less than the upwardly-revised 60,000 loss in January. At the same time, outplacement firm Challenger, Gray & Christmas reported that planned layoffs dropped to 42,090, their lowest level in four years.

The jobs reports were an encouraging sign ahead of Friday's employment report from the government, which is currently expected to show 50,000 jobs were dropped from payrolls last month and the unemployment rate ticked up to 9.8 percent.

White House economic advisor Larry Summers cautioned yesterday that recent winter storms in the Northeast are likely to distort the numbers.

”In past blizzards, those statistics have been distorted by 100,000 to 200,000 jobs,” Summers said on "Fast Money" yesterday.

In Washington, the Senate approved a bill to resume aid to unemployed Americans, after a dispute with Senator Jim Bunning (R-KY) that had held the bill up was resolved.

Still to come: At 2 pm ET, the Federal Reserve issues its Beige Book, the region-by-region assessment of the nation's economy.

This "better than expected" recovery marches on and if losing 20000 jobs in Feb is better than expected then so be it. Plus jobs numbers on Friday are "distorted" by the snow storm so don't be surprised if the jobs numbers were strong relative to the conditions. Well Larry that is not the only thing that is distorted. You and your whole "recovery" is more than distorted its convoluted. He says that ”In past blizzards, those statistics have been distorted by 100,000 to 200,000 jobs,” I get then lets just "adjust" the jobs report up by oh let say 150000 so we can show the "resilience" of the jobs market.


This sounds like what Madoff did for the last seven years. You know borrow money and make up stories about how well he was doing. The SEC refused to investigate because the highest level of government was involved. What are we doing now... borrowing money and making up stories.

I digress, sorry for the rant. The market is still moving up and has cleared the 50 day. The MACD is now back above the zero line and we are heading for 10500 which I said would be the shorting zone. I am hearing that a close above 1125 S&P would be bullish. We are now at 1124.78 so I think they are about to say that we are back in an uptrend. I am still waiting for weakness to short.




Mikey
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