July 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 .
The Dow lost 1.9% to close at 8473 on strong
volume. The next key support level is 8000, from September
This is a
bear market, with primary and secondary cycles trending
The Nasdaq Composite rallied in the morning
before closing down 0.5% at 1375, approaching support at 1357,
from October 1998.
The primary and secondary cycles are in a down-trend.
The S&P 500 fell 17 points to close at
900, below the October 1998 support level of 923.
Primary and secondary cycles trend downwards.
Second-quarter earnings missed recently
lowered forecasts and the chip-maker is to cut 4000 jobs
because of weak PC demand. (more)
The PC-maker reported June-quarter earnings
per share down almost 50%, matching forecasts. (more)
The Fed chairman's testimony fails to lift the markets.
The All Ordinaries closed below the 3130 support level at 3107,
down 28 points on normal volume.
The primary cycle is in a bear trend. The secondary cycle has
resumed its down-trend.
MACD (26,12,9) has joined Slow Stochastic (20,3,3) below its
Exponentially-smoothed Money Flow signals distribution.
WMC angers analysts [WMC]
WMC issues an earnings warning, due to increased production
downtime at Olympic Dam copper mine, shortly after analysts were
given an upbeat tour of the mine. (more)
Relative Strength (price ratio: xao) and MACD are weak, while
exponentially-smoothed Money Flow still signals accumulation.
National Foods [NFD]
After breaking above resistance at 3.30, NFD has traded in a
Relative Strength (price ratio: xao) is strong but
exponentially-smoothed Money Flow and MACD show bearish
TAB Limited [TAB]
TAB has formed a pennant (lower highs and higher lows) after
a strong up-trend. Relative Strength (price ratio: xao) is
rising, exponentially-smoothed Money Flow is improving, while
MACD has swung up while above zero.
Short-term: Short in selected
sectors. The Slow Stochastic and MACD are below their
respective signal lines.
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
Thought for the Day:
If you can keep your head. When all about you are losing
theirs. - Rudyard Kipling
Access the Trading Diary Archives.