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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, March 29, 2013

I have to buy this one for a 5 bagger

I make these call very rarely.  The last one was Natural gas at 2.00.  I still expect 10.00 in the long run. Sometimes things just so far out of whack that  the outcome is about as certain as it can be.  I think that the stock market is one of those things.  Since the crash stocks have rallied about 8000 points in 4 years.  In the first quarter stocks rallied 11 percent.  The rallied as been assisted not by the economy or incomes or even housing but artificially by the FED.

I think it is time to just start shorting the averages and I will use the SPXU. That's about it plain and simple.  I don't know when but I am certain about the what. The closing price is 27.57.  I would expect the market to rally for at least 5 days into the new quarter.  I would expect to buy this more than once. The risk reward at this level is outstanding.  I will post my buys on this one.

Mikey
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