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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

Government Motors( GM) to buy subprime loan lender

No Credit, Bad credit, No Job?....No Problem

Remember what subprime loans did to the housing market? It goosed sales of homes by lending to people who could not afford to buy a house. Well, GM has decided that the way to increase sales is to make subprime loans available to low end buyers.

General Motors said it will acquire auto financing company AmeriCredit so it can increase leasing and make more loans to buyers with low credit scores.

The Detroit automaker said it will pay $3.5 billion to buy all of AmeriCredit's [ACF 24.02 4.32 (+21.93%) ] stock at $24.50 per share — a 24 percent premium over Wednesday's close. It expects the deal to close in the fourth quarter.

GM CEO Ed Whitacre said Wednesday — the deal will make GM more competitive in auto financing. GM executives have said their sales have been hurt by a lack of subprime and lease financing.

"It's good for customers, it's good for dealers and good for us. It's good for our customers because it gives them more choice, more competition," Chris Liddell, the company's chief financial officer, told CNBC Thursday. "It's good for dealers for the same reason."

The acquisition is also another step in the company's move to file for an IPO, Liddell said.

"It's useful, it's another helpful building block is the way that I'd put it, and we've been putting in place all the necessary building blocks during the course of this year for the IPO and this is another useful step in that direction," said Liddell.

Liddell, however, said owning the subprime lender will help the company repay its debt to the American government."Not everything associated with non-prime is necessarily bad. We think these are important people who are responsible with the way they deal with their loans and there's an opportunity to market to them," said Liddell. "In terms of the IPO and getting the government back its investment, if anything we think this enhances it because it actually allows us to sell more vehicles in a responsible way and a profitable way."


You can see the mentality of this corporate/government executive when Liddell says, Not everything associated with non-prime is necessarily bad. There's an opportunity to market to them," said Liddell. "In terms of the IPO and getting the government back its investment, if anything we think this enhances it because it actually allows us to sell more vehicles in a responsible way and a profitable way."

No credit bad credit no problem. Do you have a job? No, well come in anyway. Come on down to Government Motors. We will do anything to get your business. Everyone wins, you get the car on easy credit terms and we get to take our stock public and pay back the government all that money we borrowed. Including the 3.5 billion we borrowed for Americredit.

Mikey
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