June 4, 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 tested resistance at 9600 before
rallying to 9687 on strong volume, as buyers re-entered the
The index has broken through the 9800 support level. On
reflection, I believe that it would be conservative to treat this
as a secondary cycle movement and to call a primary bear-trend if
the index breaks below support at 9500. Identifying the secondary
cycle is difficult when the market does not show a clear
The Nasdaq Composite recovered 1% to close at
The primary and secondary cycles continue to trend
The S&P 500 closed unchanged at 1040.
Remember, the pattern completed on
May 6th has a target of 960.
The primary and secondary cycles trend downwards.
IBM expects to take a charge of
$US 2.5 billion as it extricates itself from hard disk
Greenspan gives comfort
Alan Greenspan says that the
US economy is showing positive signs but "it's not going to be
a dramatic upswing". (more)
The All Ords fell sharply to close at 3301 on
regular volume, signaling that buyers are scarce.
Chaikin Money Flow is declining, signaling
MACD (26,12,9) has joined Slow Stochastic
(20,3,3) below its signal line.
Rates rise and strong dollar expected
The RBA is expected to announce a rise of at
least 0.25% in official interest rates today, with a positive
effect on the dollar. (more)
Drug rivals seek merger [SIG]
Australian Pharmaceutical Industries and
Sigma continue to seek a merger, despite the previous
rejection by the ACCC. (more)
Both stocks have weak Relative Strength
(price ratio: xao), MACD and Chaikin MF.
ANZ outlook [ANZ]
Salomon Smith Barney upgrade
ANZ to "outperform" despite the expected rise in interest
The stock is running into resistance at 19.50.
MACD is a bit weak but Relative Strength (price ratio: xao) and
Chaikin MF are strong.
Gold powers on
The gold index XGO surges ahead. The 30-week
weighted MA is rising steeply and Relative Strength (price
ratio: xao) continues to make new highs.
Short-term: Avoid long. Maintain tight
Medium-term: Wait for the All Ords to signal a
Long-term: Wait for a bull-trend on the Nasdaq
or S&P 500 (primary cycle).
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