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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, February 22, 2011

Housing prices and consumer surveys

Single-family home prices fell for the sixth month in a row in December, bringing them closer to the low seen in 2009.The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.4 percent in December from November on a seasonally adjusted basis. For the year 2010, prices fell 2.4 percent.

While the composite held above its 2009 low, 11 cities hit their lowest levels since home prices peaked in 2006 and 2007. Unadjusted for seasonal impact, home prices fell 1 percent for the month, leaving them just 2.3 percent above their April 2009 lows. Eighteen of the 20 cities showed annual price declines in December and 19 out of 20 saw monthly price drops.During the fourth quarter, home prices declined 3.9 percent from the previous quarter and were down 4.1 percent compared to the fourth quarter 2009


 In related news U.S. consumer confidence rose in February to a three-year high amid improved optimism about the economy and income prospects, according the conference board.

The Conference Board, an industry group, said its index of consumer attitudes rose to 70.4 in February from a revised 64.8 in January. It was the highest level since February 2008. January was originally reported as 60.6. The Conference Board revised January's figure to 65.6 earlier in the month to reflect newly included data collected by the Nielsen Co that will now be part of the survey.

The expectations index rose to 95.1, its highest level since December 2006, from 87.3, while consumer expectations for inflation in the coming 12 months rose to 5.6 percent from 5.5 percent the month before. Inflation expectations were at their highest since June 2009.

I guess the people surveyed were short their houses.

Mikey
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