Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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

Saturday, April 2, 2011

Mikey will no longer comment on the economy or the Fed

The system is out of whack. The reality is that the economy and the official versions are so different that it is not constructive to comment on the supposed economic reports. The reports are pure fiction. The markets worldwide are being manipulated and are nothing more than a currency/commodity play. It is a scam of major proportions. The only way to deal with this is by pure technical analysis or monitoring the price action. Therefore, my blog, for the most part, will be strictly technical. I will stick to the book and simply report my buy and sell signals.

Trades will be listed on the top right hand corner of this blog. The short term trades reflect a pure technical approach to the market. The stocks or ETF's I choose are based solely on price action, relative strength and recent earnings.I am looking for the strongest and best earning stocks over the past year that have strong technicals and fundamentals.

Long term trades reflect what I see as the end game or outcome of this manipulation. I believe that this kind of manipulation will end in a crash. I believe that the commodities markets will also crash when scam ends. These trades have nothing to do with price action and may run negative for some period. I am extremely bearish on oil, gold, silver, and commodities in general. I, as you know have been saying that for well over a year now and have been in and out of these stocks usually will small to medium losses.

I am taking them on again because I sense this game is about to end. These kinds of trades have a tendency to lose for long periods of time and skyrocket when the gig is up. They leave the majority holding the bag. I am confident about these trades but it requires a great deal of patience and a willingness to be wrong for long periods. I will never know what sell off will take, and when it comes I will not short it so I must position my self before it happens. Commodities are at their highs now so I feel it is a good time to do it.

Technical analysis takes the opposite view. It only buys what is in now and is running. The hot item. That is no bed of roses either but if you like short term results it is the only way to go. Stops need to be placed or protective puts need to be purchased to protect against a big hit which will surely come at some point.

I watch the relationship between the 20 and the 50 day. The stocks that have the 20 above the 50 and have both averages above the 90 day and all 3 averages must be rising for me to consider them as long side trades.  I then look at relative strength and recent earnings trends and strength of their industry groups for a buy candidate.  The overall market must also be buy rated for me to put on a long trade. I can use ETF's and just trade the market or buy a strong individual stock. The reverse is true for shorts. I will only short if the market is sell rated and the 20 has been below the 50 and the 50 is below the 90 day.

I will have add a list of stocks that I am watching to buy and to short.  These stocks will have the technicals I need to buy but may not be in a buy or sell zone.  Generally to buy I like to put on the longs and shorts around the 50 day.  The long positions are put on as the stocks sell down to the 50 day. Strong stocks tend to bounce off of their 50 day averages at least 3 times before they end their advance. The same applies to the short side They tend to bounce off of their 50 day 2 to 3 times before they advance.

Mikey
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)