Dear Diary: Should I Buy or Sell?


Jim Jubak Image Jim Jubak Founder and Editor,

How do you keep your trading on track in a go-go market that could turn down at any time? Use a simple trading diary to record your reasoning, and use that to guide your next move, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

We've got a momentum market right now. And it's a particularly tricky one, since investors have to follow two momentum trends in their buy/sell/hold decisions.

That's why I'm finding the investment diary I keep especially valuable right now.

Let me start by telling you about the two kinds of momentum I see driving global stock markets right now. Then I'll explain what kind of investment diary I keep and how it's useful in this environment.

Upward-Tug Momentum
The first kind of momentum is your everyday, garden-variety momentum. Investors and traders buy stocks, which drives prices higher, because they see stocks moving higher.

On Wednesday, the Standard & Poor's 500 Index (SPX) stock index rallied for the sixth trading session in a row. The index had set new five-year highs over four days. For the day, new highs on the New York Stock Exchange outpaced new lows 357 to 7.

I remember checking in just before noon and being stunned at the list of stocks that had already set new 52-week highs: BlackRock (BLK), Cree (CREE), Walt Disney (DIS), Lennar (LEN), Marathon Petroleum (MPC), Monsanto (MON), National Oilwell Varco (NOV), Novartis (NVS), Southern Copper (SCCO), Stryker (SYK), and Weyerhaeuser (WY), to name just a few.

I remember scanning the list and thinking, "What should I buy?