April 24, 2002
These extracts from my daily
trading diary are intended to illustrate the techniques used in
short-term trading and should not be interpreted as investment
advice. Full terms and conditions can be found at
The Dow weakened further, closing at 10030 on
reasonable volume. The short-trend is down but the secondary
cycle up-trend is intact.
The Nasdaq Composite index closed 1% down at 1713, signaling an
intermediate down-trend. A break below the 1700 support level
will signal a down-trend on the secondary cycle.
The S&P 500 followed a similar pattern,
closing lower at 1093, approaching the 1070 support
AOL write-off "the biggest in history"
AOL was forced to write-down its investment in
Time-Warner by $US 54.2 billion, reflecting the fall in market
value of its assets. At least they paid in "funny money", one
fund manager observed. (more)
The telecom giant lost nearly $US 1 billion
in the first quarter. (more)
The All Ords dropped sharply to close at 3324
on strong volume.
Chaikin Money Flow declined further, signaling
Mayne under the knife [MAY]
Analysts cut their
recommendations on Mayne Group Ltd after their earnings
downgrade - the third in a row. (more)
There was strong distribution - Chaikin Money
Flow plummeted, with Volume more than 10 times the
Competitor, Ramsay Health Care [RHC] moved
slightly higher on the day, after confirming that it would meet
earnings estimates, but the longer term picture is also weak
with a bearish divergence on Chaikin Money Flow.
Short-term: Avoid long. Keep stop losses on
existing trades as tight as possible.
Medium-term: Wait for the All Ords to bottom
out - the double top has a target of 3230 to 3240.
Long-term: Wait for the Nasdaq or S&P 500
to break above their January highs.
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