August 13, 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 retreated 2.4% to close at 8482 on
higher volume, almost completely reversing the follow-through day
on the 9th.
The primary cycle trend is downwards. A rally above 8806 will
signal a reversal, while a correction below 8000 will signal
The Chartcraft NYSE Bullish % Indicator has given a
bull alert signal, with a reading of 32% (August 12).
The Nasdaq Composite retreated 2.9% to close at 1269, reversing
the follow-through from the 9th.
The primary cycle is in a down-trend. The failure to reach the
1355 resistance level is a bearish sign.
The S&P 500 declined 19 points to close at 884.
The primary cycle trends downwards. A break above 912 will
signal a reversal.
Fed alters bias
The Federal Reserve left the overnight bank lending rate
unchanged at 1.75% but changed its bias, towards greater risk of
economic weakness and lower risk of inflation. (more)
Applied Materials little change
Flat third-quarter results from the largest maker of
semiconductor-manufacturing equipment. (more)
The All Ordinaries continues to consolidate, closing up 6 points
at 3058 on below-average volume. The primary cycle trends down.
The Stochastic (20,3,3) and MACD (26,12,9) are above their signal
lines. Twiggs money flow is positive.
AOR report a net profit of $ 63.2 million, up from $ 47.7 million
last year. (more)
AOR is in a stage 3 top, with the 150-day moving average leveling
out. Relative strength (price ratio: xao) and MACD are weakening,
while Twiggs money flow has moved above zero, signaling
Coates Hire [COA]
COA has made a new 2-year high,
after a recent period of consolidation. The day's close was weak
and volume uninspiring, so wait for further confirmation.
Relative strength (price ratio: xao) is rising, while Twiggs
money flow has shown exceptional accumulation since mid-2001 and
MACD is bullish.
Short-term: Long. Slow Stochastic and MACD are above their
respective signal lines. Exercise caution because weakness in US
markets may spill over onto the ASX.
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:
Begin with the end in
- Stephen Covey.
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