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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

Friday, February 1, 2013

If you have locked in interest rates here is a chart for you

 
This is chart of the 20 year US government bonds. It is about to reverse a double top from 2008. It close today at 115.79. This is below its breakout top in late 2011. The top will be complete when the TLT trades below 110. A trade below 110 and all bets are off on the bond market and lower interest rates. The fact is that many investors have moved their safe money into bonds and the risk is higher interest rates.  That risk is a big one.  The Fed has convinced everyone that they are going to hold rates down. A you can see that is not happening now. Regardless of what they say go with the trend.  A trend plkayer should be moving to the sidelines on bonds now.
 
 

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