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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

Monday, May 10, 2010

Europe bailed out

DJIA 10725 +344.78 SPX 1150.74 -39.82 Nasdaq 2352.74 + 89.30 VIX 29.99 -10.96 Gold 1208.30 1202 -8.30 Silver 18.56 +.11 Oil 76.16 +1.05 RBOB(retail gas)2.15 +.03 Nat Gas 4.22 +.20 DBC (Commodities)23.10 +.32

Dollar 84.33 -.33 EURO 1.28 +.006 Brit Pound 1.4859 +.0051 Aussie ..9015 +.0162
IEV(Europe Index35.08 +2.48 EEM (Emerging Market Index)40.80 +2.41 EWZ (Brazil)68.60 4.73 FXI (China Index)40.11 +1.88

TLT (LT US Bonds) 93.83 -1.76 IEF (7-10 yr US Bonds)91.33 -.59

GDX(Gold Miners) 50.02 +.89 IYR (Real estate)51.92 +2.31 (XLF Financials) 15.72 +.63 XLE (Oil) 56.67 +.68 XLB (Materials) 32.28 +1.15 XRT (Retail)41.53 +1.74 XLK (Tech) 22.65 +.85 XLV (Health care) 33.33 +.60

Financial markets soared across the globe Monday after the European Union and International Monetary Fund ag"The EU has taken a decisive action to stamp out the speculative attack against the euro and this should be sufficient to bring some calm into the market," said Klaus Wiener, head of research at Generali Investments. "It has sent a very strong message to the market that the euro will not be allowed to fail." Agreed to a $1 trillion emergency bailout to stop the debt crisis from spreading.

The rescue, hammered out by European Union finance ministers, central bankers and the International Monetary Fund in marathon talks at the weekend, was the largest package in over two years since G20 leaders threw money at the global economy following the collapse of Lehman Brothers. EU Monetary Affairs Commissioner Olli Rehn told a news conference the package of measures "proves we shall defend the euro whatever it takes".The $1 trillion package consists of 440 billion euros in guarantees from euro area states, plus 60 billion euros in a European instrument.

EU finance ministers said the International Monetary Fund was expected to contribute 220 billion euros, taking the total to 720 billion euros, or around $1 trillion.

Both the EU and the IMF has already approved a 100 billion euro package to support Greece, whose budget deficit blew out last year to 13.6 percent of GDP.

To secure the funds, Greece has committed to deep budget cuts that have already caused violent public protests in the country as it moves to get the deficit back down to the EU limit of 3 percent.

We now see ... wolfpack behaviors, and if we will not stop these packs, even if it is self-inflicted weakness, they will tear the weaker countries apart," Swedish Finance Minister Anders Borg told reporters in Brussels before the EU meeting.

Economists estimate that if Portugal, Ireland and Spain eventually come to require bailouts similar to Greece's, the total cost could be some 500 billion euros.

Greece has agreed to a deficit of 3% last year it was 13.6%. How do you think their economy will look if they CUT spending? They also need to back Portugal, Ireland and Spain. I assume they will cut spending too?

The money here is going to rollover debt that produces nothing. It is a temporary fix. They say "we shall defend the euro whatever it takes". The EURO is rallying today but in the long run Europe has solved nothing. They are extending and pretending. How to you solve a debt problem? They say create more debt.


This is a chart of the DJIA. Look at the 9/22/08 in the center of that chart. That was the TARP bailout.




Mikey
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