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Trading Diary
September 27, 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 .






USA
The Dow plummeted 3.7% to close at 7701 on strong volume. The key support level is 7700 to 7500 with another at 7000. 
The primary cycle trends down.

The Nasdaq Composite Index fell 1.8% to 1199.
The primary trend is down.

The S&P 500 lost 27 points to close at 827. Support is at 780 to 795.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator reflects a bear confirmed signal at 34% (September 26).



Consumer confidence low
While consumer spending has risen, consumer sentiment is falling. (more)

GE loses spark
While affirming forecast earnings for the current year, GE says that 2003 looks more challenging than previously expected. (more)



Gold
New York: The spot gold price, surprisingly, closed down 50 cents at $US 319.90.



ASX Australia
The All Ordinaries rallied above the 2940 support level, closing at 2966 on strong volume.
The Slow Stochastic (20,3,3) crossed to above its signal line. Twiggs money flow signals distribution.
The primary trend is down.





Gold stocks
Three major gold stocks gapped down on Friday.
Newcrest Mining [NCM] broke out below a 3-month rising wedge (normally a bullish pattern) with Twiggs money flow signaling distribution.





Lihir Gold [LHG] has broken out of an upward trend channel. Twiggs money flow has broken a 6-month up-trend.





Twiggs money flow is stronger on AurionGold but price has gapped down from a short-term pennant pattern. Support is at 2.93.






Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 1 (RS is falling)
  • Materials [XMJ] - stage 4
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 4
  • Consumer Staples [XSJ] - stage 1 (RS is rising)
  • Health Care [XHJ] - stage 4
  • Property Trusts [XPJ] - stage 3 (RS is rising)
  • Financial excl. Property Trusts [XXJ] - stage 4
  • Information Technology [XIJ] - stage 4
  • Telecom Services [XTJ] - stage 1
  • Utilities [XUJ] - stage 2 (RS is rising)
Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) has fallen to only 15 stocks, compared to 99 on August 23.
Notable sectors:
  • Forest Products


Conclusion

Short-term: Avoid new entries. The 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 (primary cycle).

Colin Twiggs


Thought for the Day:

I made a fortune buying late, and selling early.

 - Unknown.
(With thanks to Uturn on the forum)






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