August 1, 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 2.6% to 8506, holding above Monday's
. The primary cycle trends downwards.
The Chartcraft NYSE Bullish % Indicator has a
reading of 24% (July 31). See
Bullish % Index for more details.
The Nasdaq Composite dropped 3.6% to 1280 but has not yet
closed the breakaway gap from Monday's
follow-through. Primary cycle is still in a down-trend.
The S&P 500 closed 27 points down at 884, testing the
follow-through day from Monday.
The primary cycle trends downwards.
Manufacturing growth slows
The Institute of Supply Management factory index fell to 50.5
in July, from 56.2 in June. (more)
Disney records a drop in third-quarter earnings and warns on
fourth-quarter performance. (more)
The oil and gas giant reported a 40% drop in second-quarter
earnings per share. (more)
Stephen Roach on the US economy
Morgan Stanley's chief global economist takes stock of the US
The All Ordinaries consolidation continues, closing down 9 points at 3024 on average
volume. It is important that the next week hold above the 2940
The primary cycle trends down.
MACD (26,12,9) has joined Slow Stochastic (20,3,3) above its
signal line. Exponentially-smoothed money flow signals
Lihir Gold [LHG]
LHG is entering a stage 4 decline, with 20-day moving average
crossing below the 150-day moving average. Relative strength
(price ratio: xao) is declining and MACD is weak but
exponentially-smoothed money flow displays a bearish
Westpac off target [WPC]
Chief executive David Morgan told analysts that the bank is
likely to miss its growth target for this year, citing poor
equity markets and "some bad news on the corporate debt side"
as the cause. (more)
WBC recently broke down from a large triangle. Relative
strength (price ratio: xao) is still positive but
exponentially-smoothed money flow and MACD show weakness.
Qantas strike action [QAN]
More than 6000 of the airline's staff strike over pay demands.
QAN is in a trading range between 4.30 and 4.90. Relative
strength (price ratio: xao), exponentially-smoothed money flow
and MACD are all positive.
Short-term: Be cautious in long. Slow Stochastic and MACD are
above their respective signal lines but exponentially-smoothed
money flow signals distribution.
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:
It is not the strength of the body that matters, but the
strength of the spirit.
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