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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 14, 2010

Gamekeeper linking lower market to higher Gold

The gamekeeper is linking the price of Gold to movements in the stockmarket.

Here is the line:
Gold Ends Below $1,208 as Stocks Retain Interest

Gold pared earlier gains Wednesday, slipping off a brief rally as U.S. equities and foreign exchange markets held steady and dampened interest in the safe-haven metal.
Spot gold [XAU=X 1208.45 -2.20 (-0.18%) ] was last bid around $1,208 an ounce midday Wednesday, against $1,210.65 late in New York on Tuesday.

U.S. gold futures [GCQ0 1208.4 -5.10 (-0.42%) ] for August delivery settled down $6.50 at $1,207 an ounce.

A weak reading of U.S. retail sales earlier Wednesday bucked investor confidence, helping to push the yellow metal higher for a brief rally.

Meanwhile, the euro [EUR=X 1.2738 0.0016 (+0.13%) ] hit its highest in two months against the U.S. dollar, reversing earlier losses. Analysts said the second monthly drop in retail sales and the international trade data this week had prompted some economists to scale back their U.S. growth forecasts.

"You have got to be frightened to want to be long of gold, and we don't have that factor," said Credit Agricole analyst Robin Bhar. "But we still have uncertainties. There are still worries about debt, about currency devaluation, about inflation becoming higher. That is all supportive of this notion of there being a fairly solid floor for gold."


The reality is that Gold will follow the market down. As the news get worst for the economy the bugs will be buying the pullback. What cracks me up is the reference to Gold as the safe-haven metal. There is nothing safe in Gold. Gold is a commodity just like oil when it tanked from 148 to 30 in 2008. There is a lot of leverage in this stuff and they are running out of people who are going to buy here. The only people buying here are the ones that just woke up from a 2 year comma because all I have heard on radio, TV, and investment experts for the past 2 years is buy gold.

Mikey
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