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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

Sunday, May 2, 2010

Mikey Vs Cramer

Crramer is recommending Gold stocks specifically AEM (63.16) as a hedge against Greece. I just makes all the sense in the world doesn't it? Here's what he said on Mad Money.

Cramer doesn’t think that Europe’s debt woes are a reason to sell North American stocks, but the ailing countries of Greece, Spain and Portugal may warrant a look at the gold miners.

After all, gold acts as insurance against both inflation and a volatile economy. It’s also one of Cramer’s big themes of 2010, as governments around the world continue to print money and devalue their currencies. And he has no doubt that the happenings across the pond will make people crave this precious metal.

Now, investors could play gold through the SPDR Gold Shares(GLD 115.36) exchange-traded fund, which tracks the price of gold, or they could buy a miner like Agnico-Eagle Mines [AEM 63.16 -0.61 (-0.96%) ]. Granted, these companies can screw up no matter how much the market’s paying for bullion, but they can also offer more upside when they boost their production.

Golly gee how can you lose gold acts as insurance against both inflation and a volatile economy and double bonus time it is Crammer's big themes of 2010. I remember Cramer's big theme in 2007 was NYX and TM Here are the charts of those two stocks. The tops are in early 2007. What makes Cramer look good is that he was on the stock at 80 in late 2006. That run got alot of suckers...err investors to buy it. The charts look amazingly similar don't they. One makes cars and the other one distributes capital to the masses. The charts say they are in the same business. Go figure.






Mikey says that we will have deflation and an economy that is going to sink like a rock over the next 2 years. I guess that puts me on the other side of the two icons Buffet and Cramer. I would assume that Gold goes higher in the short term because the master is touting it now but in the long term it is a disaster. . Maybe Gold will have a run like TM and NYX did in late 2006 but the net net is that in the end the believers are going to buy the pullback right into the ground. Remember the sell signal for Gold is at 1060 If it drops below that number it is a dead duck.

What Cramer is saying is hold your stocks and buy Gold as a Hedge. Don't sell because the sell off is not about our economy it is about Europe. Cramer is Captain obvious how can you not believe Captain Obvious?

Mikey
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