Trading Diary
April 26, 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 Terms of Use .




USA
The Dow dropped more than 1% to close at 9910 on normal volume, closing below the 10000 level for the first time in 2 months. The short-trend is down but the secondary cycle up-trend is still intact.
The Nasdaq Composite index closed down almost 3% at 1663. The break below the 1700 support level signals the start of a down-trend on the secondary cycle.
The S&P 500 fell 1.4% to close at 1076, testing the 1070 support level.
 
GDP grows by 5.8%
The economy grew at 5.8% in the first quarter, the highest rate in 2 years. (more)
 
Market concerns
Despite strong GDP growth, the market has been undermined by a slew of profit warnings, corporate accounting worries, declining consumer confidence and tensions in the Middle East. (more)
 
Verisign 
The website registration and online security stock fell 46% after cutting sales forecasts for the second quarter. (more)
 
ASX Australia
The All Ords formed an inside day on strong volume, signaling uncertainty, closing at 3329. 


 
ANZ reaches $1 billion [ANZ]
ANZ reported a first-half profit of $1.05 billion, 17% above the corresponding period last year. (more)
 
Banks see funds management as major growth opportunity
Banks have proved unsuccessful at growing their own fund management businesses so they are buying up fund managers. (more)


This is not a bad time to buy: the banks index (XBF) is in a strong up-trend while the investment & financial services sector (XIF) is weak and suffering from September 11 fallout.


 
Sectors: Energy
The Energy index is showing signs of weakening, with declining relative strength (price ratio). Mobil and Caltex have both reported losses on refining and marketing operations.


 




Conclusion
 
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.

Colin Twiggs



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