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Trading Diary
June 14, 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 penetrated the 9500 support level, falling to 9260 before recovering to 9474 on strong volume.
The break completes a broad head and shoulders pattern and signals the start of a primary bear-trend.
Chartcraft's NYSE Bullish % Indicator has given a bull correction signal, warning investors to adopt defensive strategies. 

The Nasdaq Composite closed up 0.5% at 1504.
The primary and secondary cycles trend downwards.

The S&P 500 fell to 981 before recovering to close 2 points down at 1007.
Primary and secondary cycles trend downwards.

 
Consumer confidence
June consumer confidence fell to 90.8, from 96.9 in May. The biggest decline since last September. (more)
 
Sprint PCS
The No.4 US wireless carrier cut fourth-quarter new subscriber estimates by 60%. (more)
 
Money flows into bonds
Investors switching from equities to bonds drove the yield on 10-year treasury notes down to 4.8%. (more)
 
ASX Australia
The All Ordinaries fell to 3246 on average volume, equaling the May low. A break below this level will signal the start of a primary bear trend.
Chaikin Money Flow has crossed below zero, signaling distribution.
MACD (26,12,9) and Slow Stochastic (20,3,3) are below their signal lines.


 
SingTel likely to be dropped from ASX 200 [SGT]
Singapore Telecommunications and Hutchison Telecommunications are likely to be dropped from the ASX 200 when Standard & Poors switches to free float measurement. (more)
Chaikin Money Flow has shown strong accumulation over the last 2 months, before yesterday's drop below zero. Relative Strength (price ratio: xao) and MACD remain weak.


 

Foodland [FOA]
The High Court of New Zealand set aside the order preventing FOA from proceeding with acquisition of Woolworths NZ. Rival, Foodstuffs, threatens further legal action. (more)
 
QBE Insurance [QBE]
Merrill Lynch cut their profit forecast for QBE, citing a poor investment environment, renewed terrorism fears and the rising dollar. (more)
QBE has penetrated the $7.00 support level [B] and Chaikin Money Flow has crossed below zero. Relative Strength (price ratio: xao) and MACD are weak.


 

Sectors: Insurance
The insurance index (XIN) is signaling a bear trend, with weakening Relative Strength (price ratio: xao) and falling 30-week weighted moving average.


 
Sectors: Gold
The correction on the gold index (XGO) continues with a fall of 10% from the recent high. The primary bull-trend is still strong.


 





Conclusion
 
Short-term: Avoid long and short. There is a good chance of a rally at the 3250 support level.
Medium-term: Wait for the All Ords to signal a reversal.
Long-term: Wait for a bull-trend on the Nasdaq or S&P 500 (primary cycle).
 

Colin Twiggs

 
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