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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 22, 2010

Existing Home Sales Fall

Existing Home Sales Fall, Putting More Drag on Economy

Sales of previously occupied homes fell in June and are expected to keep sinking, indicating that the housing market's troubles are likely to drag on the economic recovery.


Sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said Thursday. Economists polled by Thomson Reuters had expected sales of 5.18 million.

The report counts home sales once a deal closes. Last month's report captured some buyers receiving federal tax credits of up to $8,000 that boosted sales this year. Buyers initially had to close their purchases by June 30, but Congress extended the deadline to the end of September.

Since the tax credits expired, the number of people buying homes has fallen sharply, despite lower prices and the lowest mortgage rates in decades. The situation has been worsened by high unemployment, tight lending standards and rising foreclosures.

"Economic uncertainty is clouding that buying opportunity," said Lawrence Yun, the Realtors' chief economist. "It's still a fragile situation in the housing market."

As sales have slowed, the inventory of unsold homes on the market has risen 2.5 percent to nearly 4 million. That's a nearly nine-month supply at the current sales pace, the highest level since August. It compares with a healthy level of about six months.

The tax credit scam has ended and the sales and prices are seeking their real levels now. Tax credits were part of the smoke and mirrors recovery. The cash for clunkers, the Census workers hiring all temporarily boosted the numbers. There has been no real fix. Low interest rates are not available to the current homeowner unless they can prove income and have equity. What stimulius are they going to give us next?

Mikey
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