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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 29, 2010

Watching Apple (257)

DJIA 10467.16 -30.72 VIX24.13 -.12 10 year 2.98.09 -.0039 30 year 4.0804 +0166
Gold1168.58 +8.18 Oil 78.18 +1.37 USD 81.62 -.012

Mikey OB/OS index (80=OB 20=OS) 63

Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40

Stocks 55 Oil 52 Gold 25 Bonds 49 Emerging Mkts 67
Short ETF
BGZ 36 DZZ 69 ERY 39 EDZ 34 SMN 45 FAZ 40 SCO 39 SRS 42
Long ETF
BGU 50 UGL 27 ERX 55 EDC 70 UYM 59 FAS 60 URE 64

Mikey 50 Stock index

AAPL 45 IBM 44 HPQ 42 CRM 62 BIDU 64 GOOG 73 AMZN 44 JWN 56
COST 53 TGT 61 MCD 48 NFLX 33 CAT 67 DE 73 FCX 62 BTU 75
POT 83 NEM 40 EGO 43 DAL 50 CAL 69 APA 78 COP 66 SLB 44
JPM 61 GS 76 MS 52 AXP 48 V 43 COF 42 SPG 60 KBH 58
LEN 63 ABT 55 JNJ 31 K 29 CL 37 CLX 68 VZ 65 T 57
FDX 61 UPS 63 UNP 61 CSX 43 NUE 51 X 57 AMGM 44 BIIB 74
F 76 TM 60

Downtrends 4 Uptrends 24 Neutral 22 = +20 DJIA 55

Apple had its great earnings and according to CNBC has laid to rest the doubters. The stock closed at 251.89 on 7/20. Earnings were released after the close and the stock made a high the next day of 265.15. That high has held now for 6 days.

The money flow is a weak 47 today and falling. The 50 day average is at 256.32. A close below the 50 day and a reading of less than 40 would put me short. I would consider a close below 251.89 a reversal of the whole uptrend. If the stock reverses from here holders would not sell and will be trapped into buying the pullback.

Mikey
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