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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

Tuesday, June 29, 2010

CANDIES trend is reversing

The latest and greatest of the hot stocks story is starting to reverse trend. Before this last rally the Candies ( CMG, AAPL, NFLX, DECK, ISRG, ESRX, CRM) relative strength caused the experts(Cramer et al) to recommend to the public to buy these stocks because they held up the best in the decline. Their charts all look the same.


CMG


AAPL



NFLX



DECK



ISRG




ESRX




CRM




These stocks are in big big trouble. Notice the MACD has a non confirmation on the new highs of all of these stocks. The short term trading objective is the 200 day is for all of these. CMG 108, AAPL 218, NFLX 72, DECK 114 ESRX 45, CRM 72 ISRG has already broken the 200

Mikey
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