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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 30, 2011

CNBC runs Gold Series

This is a quote from Bob Pasini this morning:


Gold rose again this morning, partly on our CNBC interview with Charles Evans, president of the Chicago Federal Reserve. Traders—who tend to be inflation hawks and so are rather impatient with those they perceive to be doves such as Evans, Dudley, or Yellen, immediately came out and assailed Evans for stating that "the dual mandate tells us that we need to be more accommodating than we have been."
"The Gold Rush," CNBC's series on the gold industry, airs Tuesday. 


I mentioned yesterday that the market is acting like QE3 is coming but that the dollar is stable. Today Charles Evans of the Chicago Fed appears on CNBC and talks accomodation. Then today magically CNBC airs a series on Gold.


This reminds me of 2005 when CNBC hyped the then hot Real Estate markets in the US. I am becoming more convinced that the Fed really is doing nothing more than playing with smoke and mirrors now, and that Gold is on its last legs. Gold is up 37.50 at 1828 this AM. It has reversed a short term sell off and is back above all of its moving averages.

Mikey

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