rjm77me's Blog : Do you "Need a forward looking Rear View Mirror"

I as a trader need a FORWARD looking mirror which tell me what to expect from a stock. Some will say it is in the charts. That is why I said "I need a forward looking Rear View mirror" Charts do not tell me next days story. Every thing was rosy yesterday. INTC had great number and folks called me and asked what to buy in after hour session. I am glad I did not buy yesterday. I can say lady luck was on my side. As a chart reader my brain was telling me to buy some thing in after hours.

Some will say a company is undervalued or overvalued. It needs to retest the bottom or break the trend line or should be at 52 week high or ??? and the GREAT thing is everyone is RIGHT. Things go wrong when we do not have proper trade management or wrote the rules to guide us. We keep it in the head and then violate the rules just for this one time.

Charts are like REAR VIEW mirror, which provide us guidance to move forward with buy or sell decision based on our interpretation. When one is selling the other party is happy to buy. Is there a problem or am I missing something.

If you believed in charts, did you buy or sell today? Do you a keep a list of stocks to buy on down day? Warren Buffett keeps one. He is there when every one is ready to abandon the ship. He put money in American Express at $40 plus and he bought some when it was under $20 six months ago (I may be wrong). I bought and sold AXP few times.

Was he right and I was wrong - may be. Or could both be right - it depends upon your view and your trading charter. I have low risk profile and am willing to take profits and enjoy the small victories and tolerate few bruises along the way.

I borrowed following words from a great market chart reader with 40 years of experience. I will not trade without his chart service
Even on a weak day the likes of which we've just witnessed doesn't give any guarantees as to whether the selloff will have legs. But it certainly isn't a good sign. The thing that makes this 2009 rally so great is the great decline of 2008.
If you had a buy list - it was a great day to buy some stuff which went on sale - My list had CRN, NRG, DY, SXE, AA, ING, AOB and NBG. I could not buy them in last two days as others were buying hand over fist. I had to keep myself in check. I did not to jump in and pay the full price. I bought and sold NRG yesterday for $12 profit. I sold for 24.18 and was happy to buy it again at 24.37. What a way to trade! I paid higher price, as some of the support given by another great trading house. They put it on their conviction buy list. NRG opened the day at 25.13 and was I lucky to buy at 24.37 - only time will tell.

What is on your buy or sell watch list?
Where do you think market is going?