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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

Sunday, April 14, 2013

Here they come

Investors are back with a vengeance

 

Investors have plowed more than $60 billion into mutual funds and ETFs that hold U.S. stocks, according to research firm TrimTabs. That's already more than any full calendar year since 2004.
NEW YORK (CNNMoney)

Investors have been rushing off the sidelines this year and show no signs of letting up.

So far, they've pumped more than $60 billion into mutual funds and ETFs that hold U.S. stocks, according to research firm TrimTabs.
That's already more than any full calendar year since 2004. And if the pace keeps up, this year's inflow would be the largest since 2000.
Investors dove right in at the start of the year, pouring more than $30 billion into U.S. stocks in January, but inflows in February were barely positive.

That led many experts to initially dismiss the robust January inflows as a one-off related to seasonal and tax factors, said TrimTabs CEO David Santschi. But appetite for U.S. stocks has since returned.
One of the biggest drivers behind the strong inflows has been stimulus from the Federal Reserve, said Santschi.
"Investors seemed convinced the Fed has their back," he said. "They snapped up equities across the board as the Fed pumped an average of $4 billion per business day of newly printed money into the financial system."
Mutual funds, a gauge of individual investor participation, attracted about 40% of the total inflow during the first quarter.
ETFs took in the remaining 60%. While most ETFs are still primarily used by institutional investors, such as hedge funds and pension funds, ETFs that hold U.S. stocks attract both institutional and individual investors.

The rush into U.S. stocks in 2013 comes after individual investors shunned stocks for years.  With the DJI trading at record highs many are wondering whether the market has topped out or if the rally will continue, said Scott Wren, senior equity strategist at Wells Fargo Advisors.
"Up until late last year, most of these investors were happy staying on the sidelines and not really paying attention to what was going on in the stock market," he said, adding that the attitude was particularly common among Baby Boomers who were nearing retirement and had already suffered huge losses when the stock market crumbled in 2001 and again in 2008.
"Now, these same investors are beginning to realize they will not be able to fund their retirements by investing in [certificates of deposit] that yield almost nothing," said Wren.
 
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