May 15, 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 formed an inside day, showing
uncertainty, closing down at 10243 on strong volume.
The primary trend is down, secondary - up and
short trend - up.
The Nasdaq Composite held on to its gains, closing at
The primary cycle is forming a base (or stage
1), secondary trend - down, while the short trend is up.
The S&P 500 closed 6 points down at
Primary cycle - the base still shows weakness,
secondary trend - down and short cycle - up.
AOL Time Warner
Merrill Lynch analyst Reif Cohen goes against
the herd, upgrading AOL to a "buy" rating. (more)
The bankrupt retailer recorded
a $US 2.4 billion loss for the fiscal year. (more)
The All Ords rocketed 1.9% to close at 3325 on
Chaikin Money Flow continues to show a bullish
divergence, while MACD (26,12,9) and Slow Stochastic (20,3,3)
have crossed to above their signal lines.
News Corporation Limited stock surged 15% as the market ignored
the large investment write-downs and focused on stronger than
expected underlying performance. (more)
in a stage 4 decline, having under-performed the market since
October 2000. Price has gapped up, accompanied by strong
volume, but the secondary cycle is still in a
The managing director and
chief financial officer both resign. Trade in Open shares was
halted last month pending the outcome of a legal dispute with
Short-term: My concern is that the rally may not
be able to sustain itself. Long using
trailing buy-stops. Maintain tight stop-losses.
Medium-term: The All Ords has not yet formed a
Long-term: Wait for the Nasdaq or S&P 500
to break out from their bases (trading ranges).
P.S. We are trying out new Email
software. Please report if you experience any problems with the
Please forward this to your friends and
Access the Trading Diary Archives.