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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

Friday, June 4, 2010

Jobs numbers Disappoint

DJIA 9938 -315.48 SPX 1066.52 Nasdaq 22240-78.86 VIX 35.30 +5.84 Gold 1215 +5.70 Silver 17.39 -.54 Copper 2.80 -.14 Oil 71.21 -3.40 RBOB(retail gas)1.9936 -.087 Nat Gas4.79 +.10 DBC (Commodities)21.28 -.64 EURO 1.1968 +.002Dollar Index 86.28 +1.07



The truth comes out the jobs report is bad. U.S. employers added 431,000 jobs to nonfarm payrolls in May, but 411,000 of those were temporary census workers. The private sector added just 41,000 jobs, well short of the more than 500,000 economists had expected. The unemployment rate, however, fell to 9.7 percent from 9.9percent in April.

Frankly, I was looking for a bounce into June expiration and that may still happen. This is what makes this game so hard if you trade. You know what the answer is 1 year from now but they can mess with with at any time. It is, however their game, and I can respect that.

They are turning up the heat on the longs now. Silver gaped down today and a close below $17 will be the the end of Mr. Happy face for the silver bugs. That and Gold are the only two commodities that have not broken down. The rest are just plain fat getting smoked. I think there inflation story is going to come into question and soon.

I will add to my ZSL on a silver close below 17 and my DZZ on a Gold close below 1170. Added to SRS 29.17 today and shorted SPG 82.56 and AEM 57.64. Looking to short AAPL below 250. I like AAPL short because they usually don't bottom the market until they waste AAPL. Gold is a great short because when it goes it will confirm the commodity hit which is well underway now. You know for every move at the end it must make perfect sense.

Mikey
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