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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, July 15, 2010

Bond offering is Spain and Geece come at perfect time

FYI currencies trade vs the relative strengths of their economies. For example if the European economy is seen as stronger than the US the EURO goes up vs the dollar. If the US economy is seen a stronger the EURO goes down vs the dollar

The weakness in the US economy coincidentally happed just as new bonds were issued by the Spanish and the Greeks. You remember the disaster there don't you? Well gee the US economy suddenly got weak and it boosted the value of those offerings which were of course priced in Euros. Here is today's note on our market.

On the currency markets, the euro [EUR=X 1.2898 0.016 (+1.26%) ] extended gains against the dollar, nearing $1.29 for the first time in two months, after data showed the Philadelphia Federal Reserves business conditions index fell in July.

Here is a chart of the EURO..Nice little rally going on now.




If you remember the turmoil in the PIGS Portugal, Ireland. Greece and Spain that was hyped in the papers until early June then you would think that the EURO decline against the dollar. That is shown in the above chart. The good news for Europe is that the US economy just happened to get weak right as they were issuing bonds...in EUROS. I'll be damned if they got the issue off and now they are making in in the currencies market. Thanks of course to our timely economic weakness.

This international finance moment brought to you by Mikey
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