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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, August 4, 2010

More weak numbers..More deflation Talk

DJIA 10680.43 +44.05 VIX22.21 -.42 10 year 2.9406-.0092 30year 4.0777+.0298
Gold 1195.90 +6.40 Oil 82.47 -.05 USD 80.946 +.054

Economic Conditions -10.7

Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---71
Days to option expiration 12

Mikey Power Index (MPI)
BUY >60 Sell <40

Stocks 50 Oil 70 Gold 34 Bonds 52 Emerging Mkts67
USD 24 Aussie 64 Euro 65 Brit Pd 68

Short ETF SCORE 635
DXD 57 DZZ 59 ZSL 43 DUG 35 EDZ 36 SMN 40 SKF 45 SRS 46 SZK 36
QID 46 SCO 32 RXD 73 TBT 51 SDP 36

Long ETF SCORE 751
DDM 44 UGL 35 AGQ 51 DIG 58 EDC 62 UYM 64 UYG 57 URE 59 UGE 67 QLD 56 UCO 70 RXL 44 UBT 37 UPW 47

U.S. private employers added a tepid 42,000 jobs in July, versus a revised gain of 19,000 in June, a report by payrolls processor ADP Employer Services showed, two days before the government's more comprehensive jobs reading for the month.

The rise in hiring was slightly higher than an estimate from economists surveyed by Reuters for a gain of 40,000 private-sector jobs. The June ADP figure originally was reported as a gain of 13,000 jobs.

Local and state governments, as well as some companies, are squeezing their employees to work the same amount for less money in cost-saving measures that are often described as a last-ditch effort to avoid layoffs.

A new report on Tuesday showed a slight dip in overall wages and salaries in June, caused partly by employees working fewer hours.

Though average hourly pay is still higher than when the recession began, the new wage rollbacks feed worries that the economy has weakened and could even be at risk of deflation. That is when the prices of goods and assets fall and people withhold spending as they wait for prices to drop further, a familiar idea to those following the recent housing market.

Mikey
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