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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

Wednesday, July 21, 2010

Apple "Blows away

DJIA 10120.53 -109.43 VIX25.64 +1.71 10 year 2.8746 -.0789 30 year 3.8838 -.0977
Gold 1185.60 -6.20 Oil 76.40 -1.18 USD 83.49 +.57 Mikey OB/OS index (80=OB 20=OS) 57


Apple Answers the Big Question
Published: Tuesday, 20 Jul 2010

This is Bob Pasinis' take:

Apple lays the doubts to rest. Earnings of $3.51 is not just above consensus of $3.11, but above even the HIGHEST analyst estimate of $3.47.

Big question: how many marginal customers were lost from the iPhone antennaegate imbroglio? Answer: not many. 8.4 million iPhone was at the high end of most analyst expectations.

iPad sales at 3.27 million were also excellent.

Pleasant surprise: 3.47 million Macintoshes sold.

Even guidance was a bit stronger than usual. Q4 guidance of $3.44 is well below analyst expectations of $3.82 — while they always lowball the estimates, this is slightly higher than they normally give relative to estimates--it would have been around $3.35 if a typical pattern was evident.

The stock opened at 264.73 up 12.89 from the prior days close. The high was 271 on June 21. By my math 264 is lower than 271. It is currently trading at 256.97 +5.08.
A close below yesterdays close of 251.89 is a reversal to me.

I am hearing the JP Morgan saying this stock is going to go to 350. I would love to see the position that JPM has in this stock. I bet they are short. The shorts have no leg to stand on now. The antenna problem is solved, the earning are great and the outlook is fantastic. Let's see what happens now.


Notes: 10yr and 30 yr interest rates falling like a rock.
Gold trades down with the market tests trend line and holds 1180 again.
Mikey
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