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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

Monday, February 18, 2013

Why the Fed Bailed out B of A

The answer is simple.  They did not want to open a can of worms.  The banking system has not solved its problems.  They are still in the process of fixing the system.  The banks have been borrowing money from the Fed at near 0% for 4 years and still have not solved the problem.  A lawsuit by the Fed would create anxiety at a time when the stock market has been artificially pumped up.   They don't need the public running from the market right after they started buying.

The Treasury is also receiving a near interest free loan from the Fed.  The government is running a trillion dollar deficit and the money is being transferred to corporations as fast as it is printed.  There is a story today about Facebook making 1 billion and not paying taxes.  Meanwhile, corporate cash is at an all time record high.  The fact is that it is an  old fashioned theft of the treasury by, their clients, the corporations. I think it is time that this story be told and tax laws changed.

Mikey
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