I’m not into trading news events, but there are times when a trader should pay attention to the financial environment. The Warren Buffet call earlier in the week is one of those news events. Railroad stocks BNI, UNP, and CSX gapped higher on the news that Mr. Buffett was buying in the sector. That’s some significant fuel moving into that arena which won’t be moving out soon. Could someone possibly be seeing the railroads as a source of hauling ethanol across the country? I don’t know, but I do know that smart money follows the call. That adds more buying power. So a trader waits for a pullback. Yesterday the stocks had pulled back enough, and triggered classic buy signals. Now you really didn’t need to know why the stocks did what they did. The charts tell all. Watching where the money flows can help though.
