Mikey... The Market Shadow: Metal Stock sell off as Gold and Silver rally

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

Monday, April 25, 2011

Metal Stock sell off as Gold and Silver rally

In the old days the stocks would always lead the metals. I have posted some charts of leading Gold and Silver producers and the charts of Gold and Silver. You can see that the metals are much stronger than the stocks. The public is buying the stocks and metals with both hands on the idea that the dollar is going down for ever. The stocks don't believe it and are selling off. Not a good sign. The Gold miners index (GDX) was down 1.47 today as Gold rallied to a new high. Pan American -1.52, Nemont -1.30, Agnico -2.09, Coure DAlene -1.25. Those are big moves down as the Metals made new highs. You have been warned.