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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

Thursday, June 3, 2010

Jobs numbers Friday..Expect big gains

DJIA 10228 -20.48 SPX 1098 +.10 Nasdaq 2241 2292.29 +11.19 VIX 30.09 -.08 Gold 1209 -13.50 Silver17.95 -.36 Oil 73.46 +.60 RBOB(retail gas)2.06 +.04 Nat Gas 4.648 +.22 DBC (Commodities)21.90 +.09 EURO 1.217 -.006 Dollar Index 87.25 +.37

It's that time again the jobs report. This one is going to tell us that the economy is picking up steam. The media is down playing those numbers today and the market is acting weak so I would not rule out some fireworks when the numbers are released. That would off the recent sell off and wipe out the puts.

Just like the auto numbers that were juiced by the government the jobs numbers will be juiced by the Census workers. Let's see the housing sales blew up because of the tax rebate. The auto sales blew up because of government fleet buys and now the jobs numbers will blow up because of Census workers. Now that is reality.

Mikey
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