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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

Tuesday, August 3, 2010

Technical Day

DJIA 10636.38 -38 VIX 22.63 +.62 10 year 2.8887 -.0234 30 year 4.0401 -.0078
Gold 1189.30 +4.20 Oil 82.55 +1.05 USD 80.665 -.019

Economic Conditions -10.7

Mikey OB/OS index (80=OB 20=OS) 69 High 97 Low 0
Days to option expiration 13

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

Stocks 50 Oil 57 Gold 26 Bonds 55 Emerging Mkts 66
USD 30 Aussie 66 Euro 69 Brit Pd 77

Short ETF SCORE 630
DXD 57 DZZ 66 ZSL 36 DUG 42 EDZ 40 SMN 39 SKF 44 SRS 46 SZK 37
QID 47 SCO 34 RXD 67 TBT 50 SDP 37

Long ETF SCORE 727
DDM38 UGL28 AGQ55 DIG50 EDC66 UYM61 UYG51 URE57 UGE70
QLD 56 UCO 68 RXL 37 UBT 42 UPW 48


Consumer spemding was sluggish in May. Incomes were flat in June failing to rise for the first time since September. GM and Ford reported weaker than expect sales in July. Natl association of Realtors said pending sales of exixting homes fell 2.6% in June. They are 18.6% below last year. Retail stocks were hit hard on misses by Coach and Office Max and Proctor and Gamble.

Mikey
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