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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

What next?...Gold gets clocked.

My guess is that they will hold this thing up for a week or two to give the bailout credibility. The problem in Europe was not what caused the sell off but that is what the message is. Now what they need to do is knock the crap out of Gold to give this bailout more credibility. I would say that Gold is going to get hammered within a week or two.

Look at these charts, which one is out of place?

Dollar..Bottomed in late 2009



Commodities..Stopped going up with the low in the dollar in late 2009



Soybeans topped with dollar low


Corn topped with dollar low



Copper topped with dollar low




Gold..Swimming upstream and ignoring the dollar rally



Gold and the dollar are going in the same direction. The commodities markets are trading inversely to the dollar. Gold is the only one swimming upstream. The IMF is selling Gold maybe to pay for Europe????? Gold is a source of funds. Either the dollar is right or Gold is. You can't pay you bills with Gold.



Mikey
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