Charting at Sea

Gary recounts his daily routine of keeping an eye on the market while on a vacation cruise.
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If you've done something once, does that make you an expert? If you're this columnist, you're darn right it does!

So, in that vein, let me give you my expert advice on how to recover from those postvacation blues. (Truth be told, I have no postvacation blues. As I mentioned

here earlier, I might be the only person in America to get the blues while

on

vacation.)

Now, as a setup, recall that I was essentially incommunicado for roughly eight days. No newspapers, little Internet. Virtually no television or radio. And given that environment, trading was out of the question, marking a first for GBS.

So, the real trick, then, was how to get back in the swing of things come Monday, March 13, when I returned to the trading turret. And, as many of you will be taking spring and summer breaks, I thought some out-loud thinking on the subject might come in handy. Therefore, right or wrong, here was my recent game plan.

Throughout the Vacation ...

Thankfully, our cruise ship was able to pick up

CNN Headline News

, and I did flip that on throughout the day. Having closed all short-term positions before I left, it was a lot easier to keep my eye on the market with a relatively impartial eye. Still, I was really only interested in the close each day for the

Nasdaq

and the

Dow

. I only wanted to get a feel for the general direction and tone of things.

Total time spent: 10 minutes per day.

Three Days Before the Vacation Ended ...

As I mentioned earlier, the

Royal Caribbean

ship had a neat little "Internet Cafe" where I was able to log on (albeit for 50 cents per minute!) and check up on things. I had avoided checking anything early in the trip. But with a few days left, I wanted a bit more depth to what was going on. That's where the beauty of

TheStreet.com

came in. Frankly, there is no one better than

Jim Cramer

when it comes to detailing the intraday twists and turns of the market. Reading a few of his columns each day was like getting a detailed play-by-play from opening to close. That, coupled with the market reports from the

TSC

Briefing Room, and I had an excellent idea of all the important market action.

Now, you may ask yourself why a technician needs to read anything about the market. I've asked myself the same question, and have come to only one conclusion. My chart reading works best when it's used within the context of the overall market action. That is, I need at least the news headlines to subtly shape my analysis of what's going on with specific charts. So, I plead guilty for mixing in a bit of that fundamentalist mojo, but I'd be lying if I said it didn't help.

Total time spent: 15 minutes each day.

Two Days Before the Vacation Ended ...

At this point, I was dying to look at some charts, and again

TSC

came in handy. Cramer has his "tells" and I have mine. The only difference is that mine change from week to week and they come solely from what

Herb

,

Seymour

,

Adam

and Cramer are talking about. In addition, I also have been keeping my eye on

Biotech HOLDRs

(BBH) - Get Report

(uh, not so hot lately) and

Digex

(DIGX)

(duh!).

However, I find it helpful to not only look at end-of-day charts, but to also look at intraday charts. Just knowing the Nasdaq finished down 70 isn't enough. Often, in fact, it's more important to know how it finished down 70. There's a big difference between a market that opens down 200, but finishes down 70, and a market that opens up 200, but finishes down 70. No, strike that: There's a

huge

difference.

Since I wasn't able to get fresh data onto my laptop, I had to use the various Internet charting tools. The

TSC

charting feature is pretty good, but I also like

as it allows me to draw trendlines and zoom in and out of the charts. It isn't quite the same as looking at my own charts, but it worked in a pinch.

Total time spent: 10 minutes each day.

One Day Before the Vacation Ended ...

As luck would have it, the boat docked in San Juan at 8 a.m., but our flight home wasn't until 6 p.m. Thank God for Admiral's Clubs. San Juan has a nice one, and best of all, modem access. So, from 11 a.m. until about 4 p.m., I was able to download data and make the charts on my hard drive current, download email, read

TSC

and generally just immerse myself in the market.

In fact, I even went so far as to run my scans and make one or two passes through the candidates I might trade come Monday morning. I knew we'd be getting into Washington, D.C., pretty late, and since the kids were off to swim practice early the next morning, I knew I'd be faced with trying to tackle everything with just a few hours of sleep. Therefore, I could have either written off Monday or arranged to get most of my work done the day before. I chose the latter, of course, as this allowed me to squeeze in one extra day of trading. Why the urgency? It's like the argument for using leverage: If you have a method or style that yields a positive expectancy, it's to your advantage to have as many at-bats as possible, and by trading Monday, I gave myself an extra at-bat.

However, the most important aspect of getting reading for Monday morning was making sure I still had my confidence. Yes, you may find this surprising, but I live in constant fear that someday I'll wake up and have lost my ability to read charts. It might sound silly, but perhaps it's the golfer in me. I've just read too many stories of folks like Ian Baker-Finch, who went from British Open champ one day to a guy who couldn't break 80 the next. And having traded for a while now, I know the two just aren't that different.

Therefore, to help me get the feeling back, I resorted to something I highly recommend for many of you: a mock-trading session. Essentially what I did was set my scans on

TC/2000

back a few days, so the software would pretend it was Monday instead of Friday. Then I went through my normal routine, picking both longs and shorts.

After that, I moved each chart ahead one day at a time noting winners and losers each day. If I still "had it," my win and loss rates, as well as win and loss percentages, should be roughly the same as my historical averages. Whew! Thankfully, they were, and I felt a whole lot better about tackling this stuff for real.

Total time spent: five hours

The First Day Back From Vacation ...

There are so many administrative things I need to do each day to avoid screwing up, that it's easy to forget some of them if you've been away for a while. Therefore, I know from experience that I need to be extra diligent about the administrative details. Recording my fills properly, noting every open and closed position and making sure my broker has all my limit and/or stop orders are the little things I often screw up, and never to my advantage. So, I try to go slowly and make sure every step of my "process" is completed.

And ... that's how I did it. Truthfully, having traded over vacation (my death march while "skiing" in Utah over Christmas) and having not traded, I'd actually prefer to keep my trading active even while I'm gone. Yes, I know the argument for devoting quality time to the family, but trust me: With two preteen girls and an independent wife, they just don't want me around that much!

And as for another cruise, there's just no way, unless anyone knows of some wireless modems with global capability!

Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he was long Digex, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide Investment advice or recommendations, he welcomes your feedback at

gbsmith@attglobal.net.