August 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 .
The Dow rallied more than 3% to close at 8743 on
higher volume, testing resistance at 8800. A bullish ascending
triangle is forming with resistance at 8806. A break above 8806
will signal a trend reversal, while a correction below 8000 will
signal continuation of the primary cycle down-trend.
The Chartcraft NYSE Bullish % Indicator has given a
bull alert signal, with a reading of 32% (August 13).
The Nasdaq Composite made a massive gain, more than 5%, to
close at 1334. Resistance is at 1355.
The primary cycle is in a down-trend.
The S&P 500 rallied 35 points, or 4%, to close at 919. This
completes a bullish ascending triangle and signals a reversal
of the primary cycle down-trend but for the fact that the
cycle-length is 8 to 10 days, instead of the 15 days minimum
for a valid secondary cycle movement.
CEOs sign off
Most companies have completed the certification of their
financials with the SEC. There have been no major surprises so
Adelphia will not certify results
Troubled cable operator Adelphia Communications will restate
results from 1999 to 2001.
The troubled airline seeks a $US 1.8 billion federal loan to
stave off bankruptcy. (more)
The All Ordinaries continues to consolidate, closing down 12
points at 3046 on below-average volume. The primary cycle trends
The Stochastic (20,3,3) and MACD (26,12,9) are above their signal
lines. Twiggs money flow is positive.
NewsCorp reports record loss [NCP]
News Corporation reported an operating loss of $12 billion,
including a further $3.5 billion write-down of Gemstar.
NCP is in a stage 4 decline, approaching the target [T] from the
double top pattern at [M]. Relative strength (price ratio: xao)
is falling, while Twiggs money flow and MACD both show small
Harvey Norman [HVN]
HVN has been in a stage 4
decline for the last year but is now starting to show some
positive signs. Relative strength (price ratio: xao) is still
weak but MACD shows a bullish divergence [+].
Twiggs money flow has a bullish divergence [+] followed by a
further bullish sign, where a trough respects the zero line [$].
Short-term: Long. Slow Stochastic and MACD are above 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 man who is right
always has two forces working in his favor - basic conditions and
the men who are wrong.
- Edwin Lefevre.
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