April 30, 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 .
The Dow rallied 1.3% on a smaller than expected
decline in consumer confidence, to close at 9946 on strong
volume. The short-trend is down but the secondary cycle
up-trend is intact.
The Nasdaq Composite index rallied 1.9% to close at 1688. The
secondary cycle is still in a down-trend.
The S&P 500 rose 1.0% to close at 1076,
above the key 1070 support level. The down-trend on the secondary
cycle is intact. The two highs at 1180, in January and March, and
the intervening trough at 1070 have formed a double
top chart pattern. The calculated target for the downward
breakout is 960, coinciding with the low of September
WorldCom CEO quits
CEO Bernard Ebbers, facing $US 30 billion in
debt, plunging stock prices and an accounting investigation,
The All Ords fell to 3288 by the afternoon but
then rallied to close back at 3300 on strong volume. If the index
breaks below 3300, the next major support level is at 3230 to
3240, the same as the target from the double top pattern.
Private hospitals in crisis
Stocks of Mayne Group [MAY], Ramsay Health
Care [RHC] and Healthscope [HSP] fall as private hospitals are
hit by the medical insurance crisis. (more)
All three stocks are showing bearish
divergence or weakness on MACD.
St George [SGB]
St George rises to $19.50 despite $94 million
dot-com write-off. (more)
Equivolume shows strong distribution taking
place at these levels.
Short-term: Avoid long. Keep stop losses on existing trades as
tight as possible.
Medium-term: Wait for an All Ords reversal.
Long-term: Wait for the Nasdaq or S&P 500 to break above
their January highs.
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