Trading Diary
May 16, 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 recovered to 10289 on normal volume.
The primary trend is down, secondary - up and short trend - up.

The Nasdaq Composite formed an inside day, with a slight gain to 1730.
The primary cycle is forming a base (or stage 1), secondary trend - down, while the short trend is up.
 
The S&P 500 gained 7 points to close at 1098.
Primary cycle - the base still shows weakness, secondary trend - down and short cycle - up.

Dell Computers

Dell reported April-quarter earnings of 17 US cents per share, the same as last year, compared to an expected 16 US cents. Sales were largely unchanged at $US 8 billion. (more)
 
ASX Australia
The All Ords had another strong day, closing at 3343 on strong volume.
MACD (26,12,9) and Slow Stochastic (20,3,3) are both above their signal lines.


NewsCorp [NCP]
 Vivendi threatens to withdraw from the purchase of NewsCorp pay-TV assets in Italy. (more)
 NCP climbed in the morning session before retreating to close 19 cents down on strong volume.  


James Hardie [HDX]
The fiber cement company will make a capital return to shareholders, from the sale of its gypsum business. Fourth-quarter earnings were strong despite annual earnings falling 23%. (more)
MACD and Chaikin Money Flow show weakness.


 
Lion Nathan [LNN]
The brewer reported a 12.5% increase in first-half earnings. (more)


Relative strength (price ratio: XAO) is increasing but the sector index (XAT) shows a stage 4 decline.


 
Insurance shakeout
A PriceWaterhouseCoopers report warns that the industry faces rationalization and only a handful of insurers will survive. (more)
Relative strength (price ratio: All Ords) and the 30-week weighted moving average show the sector in a stage 4 decline.


 




Conclusion
 
Short-term: 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 base.
Long-term: Wait for the Nasdaq or S&P 500 to break out from their bases (trading ranges).

Colin Twiggs



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