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September 3, 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 4.1% to close at 8308 on strong volume and appears
headed for the 8000 support level. The primary cycle trends down.
The Nasdaq Composite Index dropped 3.9% to close at 1263. The
next support level is at 1200. The primary trend is down.
The S&P 500 fell 38 points to close at 878. The next
support level is at 834. The primary cycle is in a down-trend.
The Chartcraft NYSE Bullish % Indicator bull
alert signal is at 46% (August 30).
Manufacturing growth stalls
The ISM Purchasing Managers Index was a surprisingly weak 50.5,
unchanged from July, while of greater concern is the fall in the
New Orders Index to 49.7, from 50.4 in July. (more)
The All Ordinaries gained a further 11 points to close at 3095 on
lower volume, holding above support at 3040 to 3050. The primary
trend is down.
The Stochastic (20,3,3) has crossed to above its signal line.
MACD (26,12,9) is above. Twiggs money flow is rising sharply.
The Reserve Bank is expected to leave interest rates unchanged.
Hardman Resources [HDR]
HDR has been trending strongly upwards, forming a rising wedge in
the last year. Relative strength (price ratio: xao) is strong.
MACD and Twiggs money flow are both positive, while the stock
tests support at 76 cents.
Short-term: Wait for the market reaction to the sharp drop in the
US markets. The Slow Stochastic and MACD are above their
respective signal lines.
Medium-term: Patience is required - 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 same Nature
that delights in periodical repetition in the skies is the Nature
which orders the affairs of the earth.
Let us not underrate the value of that hint.
- Mark Twain
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