August 5, 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 3.2% to 8043, extinguishing any chance of a "V"
bottom. The primary cycle trends downwards.
The Chartcraft NYSE Bullish % Indicator has given a
bull alert signal, starting a new column with a reading of
30% (August 2).
The Nasdaq Composite fell 3.3% to close at 1206, close to the
1200 support level from July 24th. The primary cycle is in a
The S&P 500 down 30 points at 834, below the
follow-through day from last Monday.
The primary cycle trends downwards.
Slow service sector
The Institute for Supply Management service sector index
(retail, financial, construction and other non-manufacturing
activity) fell to 53.1 in July, from 57.2 in June. (more)
Procter & Gamble
Cost savings helped turn around fourth-quarter earnings of 64
cents per share, compared to a loss of 23 cents a year earlier.
Lehman Bros. downgrade Cisco, a day before the networking company
is to release its fourth-quarter earnings. (more)
The All Ordinaries closed down 42 points at 2961 on very low
volume. The index is still above the 2940 support level. The
primary cycle trends down.
Slow Stochastic (20,3,3) is below its signal line.
Exponentially-smoothed money flow signals distribution.
AMP closed down at $13.44 after its recent profit warning, the
lowest price traded since its listing more than 4 years ago.
Relative strength (price ratio: xao), MACD and
exponentially-smoothed money flow are all weak.
Hardman Resources [HDR]
HDR continues to trend strongly. Relative strength (price
ratio: xao) and MACD are positive, and Twiggs Money Flow has
crossed to above zero, signaling accumulation.
TAB Queensland [TQL]
TQL recently formed 2 equal highs at $ 3.90. Could this be a
double top forming? MACD was weaker on the second peak but
relative strength (price ratio: xao) is rising strongly and
Twiggs Money Flow shows strong accumulation on the second peak.
Short-term: Avoid new entries. Slow Stochastic and MACD are on
opposite sides of 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:
The bow that is always bent will soon cease to shoot
- Old proverb.
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