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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

Saturday, February 16, 2013

Gold trades below 1600

A slow decline that began late last year has snowballed into a full-fledged sell off. On Friday, the yellow metal that has become the darling of the market's inflation hawks tumbled to a six-month low, briefly trading below $1,600. Since the start of 2013, gold has shed four percent – a sharp reversal from a year ago, when it surged by 10 percent over the same period.

A bearish case for the yellow metal appears to be building. The World Gold Council said in a report that while global central banks built up stocks of gold last year to their highest levels since 1964, global demand for bullion actually fell by four percent. Lack of buying from emerging market powerhouses India and China were cited as the primary reasons behind the move.

My take is that it is confirmation that for now anyway the US Central bank is putting a lid on the money machine or that the money machine approach is not working anymore. The US QE 3 is putting money in corporate coffers but the public is paying higher taxes and higher prices because of it.  The reports show that the consumer is being hit and the GDP has stalled.  I think we should try lower prices and force the Corps to pay some taxes on all that money they have stolen.

Mikey

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