This column was originally published on RealMoney on Sept. 7 at 8:30 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.
Skimming through some of the other
columns yesterday, I found myself starting to read Jim Cramer's
thesis on the current Silver Lining.
I got about as far as "let's understand the developing bull case so people can get their arms around why the market may be going up when it 'should' be going down" when I had to stop.
It's not because I disagree with Jim. Instead, it's that I'm not interested in understanding the bull case. Or the bear case. Or any case for that matter.
In fact, understanding any thesis subtly implies you might sign up for a certain point of view. And once you do that, your entire trading strategy is biased.
As an example, let's say I understood the bull case and felt, yes, stocks should be going up.
What happens later, when stocks start to go down? Do, I cut my losses and assume I was wrong?
Unlikely. Instead, I start believing that it's merely a pullback and start buying even more!
Of course, if stocks continue to fall, well then, I have a dilemma. Was my original thesis wrong? Do I continue to suffer losses? Have things changed?
Yes, all those things must surely keep fundie traders up at night.
Instead, as a technician, I need to know only two things: If stocks are breaking out, I'm long. If they're breaking down, I'm short. I neither need nor want to know why.
As a trader -- at least the kind of trader I am -- the less known the better!
Dow Jones Industrial Average
Whole Foods Market
And that is the final word from Arthur Ashe Stadium, where I don't understand why so many up-and-coming tennis players adopt a baseline game when so many of the great champions of past -- Sampras, Edberg, Kramer, McEnroe and Navratilova -- have been serve-and-volley proponents.
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Worden Brothers Inc.
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Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.
Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks --
click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he appreciates your feedback;
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