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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

Monday, July 12, 2010

What a surprise Alcoa beats raises outlook

In a shocking surprise Alcoa beats earnings estimates despite lower aluminum prices. You know what they said that are raising our projection for aluminum consumption from 10 percent to 12 percent this year.'' Golly Gee that decline in their stock price must have been a mistake.

Here is the take:

The quarterly report was "constructive and it helps start the earnings season off on a positive note," said portfolio manager Brian Hicks of US Global Investors. "From the standpoint of Alcoa, they see the economy continuing to expand. It's robust enough that they have to increase their forecast for global aluminum production."

If they are telling the truth why is the stock down from 17.60 to 10. Second, notice the new low last week and the 4 day rally into the "great news". This gives you the impression that the stock is cheap. That is what they are selling now, cheap.




Like I said its lying season

The beat goes on...Mikey
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