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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, April 23, 2013

Flash Crash???? Prelude to disaster

The DJI dropped over 140 points today in less than 10 minutes. They called it a flash crash and blamed it  on a twitter account of a bombing in the White House.   I find this to be very curious.  No one questioned the 140 point rally that happened after the crash.  The implication is that the sell off was the work of an evil deed was the rally the work of  a soldier of the Lord?  The workings of this market will drive the shorts and longs to the sidelines, which is what happens at turning points.  My opinion on the flash crash is that it is a set up move. A move that lets the players know that they should not sell the next crash because everything is going to be OK.

MIkey
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