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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, November 2, 2010

Mid Term elections Fed's statement Wednesday make market giddy..Welcome to the twilight zone..It's a cook book!!

The politicians are coming to save us and the Fed is right behind them. No wonder the market is up this morning. Rod Serling could  have had a field day with this one. You know the world is coming to and end and all of a sudden out of no where the aliens come to earth to save you.  They are carrying around a book that has strange letter in it that you do not understand.  Just as you are being saved and getting on their space ship a guy yells out. Stop it's a cook book!!! I am sure that this week they will put on a really good show

Mikey
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