Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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

Friday, April 16, 2010

Expert reaction to Goldman news..Sell off "well contained"

This was posted on CNBC website:

Stunning security fraud charges against Wall Street behemoth Goldman Sachs are likely to roil the markets in the short term but unlikely to have longer-lasting effects, experts said.

Though stocks dropped sharply and Goldman [GS 164.77 -19.50 (-10.58%) ] in particular surrendered well over 10 percent in share price, the reaction on trading floors and from portfolio managers was that investors would get over the shock in short order.

"Everything we're dealing with happened a couple of years ago," said Dave Lutz, managing director of trading for Stifel Nicolaus in Baltimore. "Ultimately, once this noise has washed out, it's going to translate into one heck of a buying opportunity."

----------------------------------------------------------------------------------

The trick here is the follow through. We have not had enough follow through yet. If this thing gets hit enough and the players see it as a buying opportunity and that would seal the longs fate. Still too early but very interesting.

The market is trading in a way that gets you to believe that this sell off is well contained. It does not seem threatening. That is the way these things begin. I will say that if we have another day like this next week I will be pretty certain that we have topped. Especially if the pimps say buy the pullback. The longs then will be trapped.


Close: DJIA 11019 -124 Perfect close down but not too much and still above 11000.Now we wait to see if there is any follow through next week another day like this next week. If we do, that would tell me that we have something different happening. If we can get 500 points off yesterday's high of 11154 that will do it. The longs will be trapped and committed to buying the pullback

Note: My Parabolic SAR gives me a sell at 10925 and is moving up 25 points a day.

Mikey
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)