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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, April 1, 2010

Even the Bears are buying

DJIA 10932 +75.35 SPX 1178.93 +9.50 Russ2000 685.14 +6.50 NASDAQ 2409 +11.04 VIX 17.00 -.59

Dollar Index 80.95 -.33 Aussie .921 +.0039 Euro 1.3569 +.0062 TLT(20yrGov Bonds)88.68 -.82 IEF (7-10Gov Bonds)89.02 -.47

$XAL (airline index) 38.09 +.40 XLK (Tech)23.15 +.05 XLE (Oil Index)58.95 +1.03 XLF (Finan Index)16.08 +.13 KRE (Regional Bank index) 26.25 +.04 XHB Homebuilders Index)17.05 +.73 GDX (Gold Miners Index)1128 +13.90 XLB (BasicMatIndex)34.53 +.61 XRT (Retail Index 41.79 +.50 IYR (Real Estate index)50.06 +.28

EEM(Emerging Markets) 43.11 .98 FXI(China Index)43.25 +1.15 IEV(Europe350)89.02 -.47 (Brazil)75.17 2.08

DBC (Commodity Index)23.94 +.42 Gold 1128 +13.90 Silver 17.93 +.40 Copper 3.58 +.27 RBOB (Whsl Gas)2.32 +.016 Nat Gas 4.08 +.21



Brace For 5-10% Market Correction: Portfolio Manager

Markets climbed on Tuesday following some big news in the smartphone industry and on a strong consumer-confidence report. How long will stocks continue to rally? David Hefty, chief executive of Cornerstone Wealth Management, and Sarat Sethi, partner and portfolio manager at Douglas C. Lane & Associates, shared their insights.

“As bearish as I am, you can’t ignore the fact that there’s a tremendous amount of momentum left in this rally,” Hefty told CNBC.

“Today, we’re making our last buy into the market to be fully invested in anticipation of this next rally forward.”

Hefty said although the economy does not look like an attractive place to invest fundamentally, investors should participate for now because the market continues to rally.

“But if you don’t have a trigger finger ready to pull, you’re better off sitting in cash—you have to know when to get in and you have to be ready to exit, otherwise, you can get caught in the wrong side of the trade,” he cautioned.

In the meantime, Sethi told investors that the markets are ahead of themselves and to brace for a 5 to 10 percent correction.

“For some of the stocks that have appreciated, we’ll get a better chance to buy them in the next couple of months,” he said. “You start buying the industrials when they come back because they’re already projecting great earnings, you also start going after consumer staple companies that are going to outperform in a slower GDP environment.”


This is the weird logic that prevails at tops. I am buying because hey it's going up. To Hell with the fundamentals. He then says that he is going to buy the pullback on the correction. I am still waiting for that correction and will short into it when it comes.


Trading Signals


DJIA is on a buy now Short term sell signal is at 10844 a reversal comes on a close below 10700.



Gold and Silver have reversed from their sell signal and I am closing my short trade for now on these. Sell signal would be short term...1100 reversal 1060.




30 year bond is at the low end of its trading range of 114.50 and 117.60



Oil Top end of a trading range of 74 to 82



Dollar Index At its highs




Mikey
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