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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, August 12, 2010

GM turns 1.33 billion in profits will Schedule IPO

DJIA 10319.95 -58.88 VIX 25.73 +.34 10 year 2.7418 +.0316 30year 3.9519 +.0372
Gold 1216.70 +17.50 Oil 75.74 -2.28 USD 82.47 +.09

Days to option expiration 7

Economic Conditions: Negative -10.3

Mikey OB/OS index Neutral ---57 (80=OB 20=OS)
Mikey Confidence Index (Traders: negative) 28
Ratio Put Premiums/Call Premium Neutral .75
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutial Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)

Numbers are from the prior day close

Mikey Power Index (MPI)
BUY >60 SELL 50< Short 40<


Numbers are from the prior day close

Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<

Stocks 45 Bonds 60 Emerging Mkts 46
Oil 62 Nat Gas 36 Copper 62 Gold 38 Silver 34
USD 56 Aussie 62 Euro 44 Brit Pd 56

Short ETF SCORE 782
DXD 64 DZZ 53 ZSL 46 DUG 53 EDZ 59 SMN 43 SKF 62 SRS 49 SZK 75
QID 64 SCO 53 RXD 66 TBT 40 SDP 55

Long ETF SCORE 673
DDM 35 UGL 40 AGQ 47 DIG 45 EDC 45 UYM 59 UYG 43 URE 50 UGE 63
QLD 38 UCO 52 RXL 54 UBT 61 UPW 41

Total Score -109 (Positive number indicates uptrend)

General Motors is preparing to report second-quarter results that will show a substantial gain over the first quarter, bolstering its bid to return to capital markets and pay back taxpayers, two people familiar with the matter said.

GM, now 61 percent-owned by the U.S. government, is counting on the momentum from its quarterly results to help it clinch a $5 billion bank credit facility as it prepares a stock offering expected to be the largest ever for the U.S. market.

GM Chief Executive Ed Whitacre, appointed by the Obama administration to oversee the automaker's turnaround, said last week he expected the automaker's second-quarter result would be viewed positively by both potential investors and creditors.

"It will be good. It will be impressive," said Whitacre, who has also said his top priority is shedding the automaker's ties to the U.S. government and the label "Government Motors" used by critics of its bailout.

A GM spokeswoman said the automaker was not providing financial forecasts and would not comment. GM could finalize its bank credit facility by the end of August, allowing it to press ahead with its stock offering by the end of the year, the sources said.

For 2011, GM is projecting that it could generate $16 billion in earnings before interest, taxes, depreciation and amortization, one of the sources said. JPMorgan debt analyst Eric Selle has forecast GM's 2010 EBITDA at $11.4 billion.

What a company! While the economy goes into the tank GM earns 1.33 billion. Then they declare victory and will take the new company public. I'll bet that the "investors" that buy the stock will make money on it too. Notice the timing of the IPO will not be until the end of the year. I would guess more like April of 2011.
This stock will probably end up in your 401K as the funds sell out to the government and buy the IPO.

Mikey
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