Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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 28, 2010

How the News is manipulated

DJIA 10497.88 -39.81 VIX 24.25 +1.06 10 year 2.9866 -.0038 30 year4.0655 +.0017
Gold 1160.40 +2.40 Oil 76.99 -.51 USD 82.11 -.062
Mikey OB/OS index (80=OB 20=OS) 63

ST Trends Uptrend >60 Downtrend <40

Stocks 63 Oil 52 Gold 20 Bonds 50 Emerge Mkts 67

Short ETF BGZ 23 DZZ 79 ERY 28 EDZ 34 SMN 44 FAZ 33 SCO 41 SRS 39
Long ETF BGU 58 UGL 22 ERX 55 EDC 70 UYM 60 FAS 67 URE 70

Stocks AAPL 52 AMZN 42 BIDU 73 GOOG 75 CAT 73 NFLX 41 CRM 69 MCD 55 GDX 37 NEM 42 EGO 37 JWN 66 COST 64 TGT 65 SPG 66 DAL 51 CAL 78 APA 81 KBH 68 LEN 65 JPM 70 ABT 54 VZ 60 FDX 71 UPS 73 UNP 68 CSX 48 NUE 61 X 68

I woke up this morning and turned on the radio to XX Sports 1090 a local sports talk radio show. They were doing a commercial for a local mortgage broker. They were talking about equity increases in homes in San Diego. They excitedly mentioned that housing prices were up 12.4% in May.

They said look in the local newspaper and look at the headlines in the business section. I looked in the paper and saw the same headlines. It says "San Diego housing prices up 12.4% in May". The article says that that housing prices were up 12.4% from last May. A 1 year ago period. Buried in the article they said that May prices had increased 1.1% from the prior month. The article should have said May housing prices increased 1.1%.

I also know that May prices reflected the last of the tax credit buyers and this is July 28th and why are they so happy about May? The Jocks on XX Sports are reading a script that deliberately misleads the listener. Just like the headline in the newspaper does. The Jocks probably can't read and could care less about the accuracy of what they read. Trust me no one is going to take the time to actually read the article, and also question why the May numbers are so important, its almost August.

This type of reporting creates a false impression and that is what the writer wants to do. It is now a game of gossip where the listeners are telling people that housing prices were up 12.4% in May. I called the radio station and they said they were just reading the headline and they would let the statement stand. That goes on everyday and it is just what the system counts on. It may be helpful if you read past the headlines to find out the truth.

The earnings reports that are coming out now show big increases too. That's right they are all year over year and I suspect that most of the gains for the year were in April and May. That was when the stimulus was in full force. The fact that May of 2009 was a complete disaster make the year over year comparison very easy. Earnings are backward looking and the stimulus ran out in April. If you read the headlines for the current earnings reports they are all comparing stellar profits from 1 year ago.

Take a look at the stock market. When did it top. April 23




When did the Housing index top? April 23



I would suspect the housing prices were down in May and actually peaked in late April. The timimg of the article is disingenuous at best. The jocks at XX Sports act like your buddy but are they really? I see this stuff constantly on TV and on the radio. The lesson is don't take things at face value and read between the lines for the real message behind the story.


Mikey
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)