May 21, 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 fell a further 1.2% to 10105 on normal
volume, showing a lack of buying support.
The primary trend is down, secondary - up and
short trend - up.
Software and chip stocks led the Nasdaq Composite down 2.2% to
close at 1664.
The primary cycle is forming a base (or stage
1), secondary trend - down, while the short trend is up.
The S&P 500 fell 12 points to 1079. The
target of 960 from the double top pattern may still be
Primary cycle - the base still shows weakness,
secondary trend - down and short cycle - up.
First-quarter sales increased 17%, boosting
profit by 35%, but AG Edwards analyst downgraded the stock
because of a murky outlook. (more)
Merrill Lynch reached a settlement with the
NY state Attorney General, agreeing to pay $100 million in
fines and to repair the "Chinese wall" between its securities
analysts and investment banking divisions. (more)
The All Ords closed down at 3329 on normal
volume. The next support level is 3250.
Chaikin Money Flow crossed to below zero,
Slow Stochastic (20,3,3) crossed below its
The newspaper and online publisher is expected to announce a
major restructuring, as early as next week. (more)
FXJ shows a bullish
divergence on Chaikin Money Flow, while Price Ratio still looks
CSR announces "solid" results and plans to
spin-off its sugar division in the new year. (more)
Chaikin Money Flow shows strong distribution
over the last 6 months.
Price Ratio and the 30-week weighted moving
average show a stage 3 top - and the possible start of a stage
Short-term: Avoid new entries. Maintain tight
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).
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