Home Site Map About Us Privacy Policy Advertise (pdf) Contact Us
 
 
sitesearch
 




Crosshairs

To use crosshairs on the charts, select View >> Crosshair Cursor.
Click and drag to move the crosshairs across the chart.
If you have the Zoom function engaged, depress the Alt key before clicking and dragging.



Trading Diary
October 29, 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 dropped sharply in early trading but later rallied to close unchanged at 8368 on average volume. The market is moving sideways, signaling uncertainty. A primary trend reversal will be signaled if the index rises above 9130.

The Nasdaq Composite Index lost 1.2% to close at 1300. The primary trend will reverse if the index breaks above 1426.

The S&P 500 lost 8 points to close at 882. The primary trend is down. The index will complete a double bottom reversal if it rises above 965.

The Chartcraft NYSE Bullish % Indicator has swung to a bull alert signal at 36% (October 28).



Consumer confidence dives
The Conference Board consumer confidence index fell to 79.4 in October from 93.7 in September, much worse than the expected 4-point drop. (more)

Rate cuts expected
The plunging consumer confidence figures may force the Fed to further cut rates at its November 6 meeting. (more)



Gold
New York: Spot gold rallied a further 140 cents at $US 316.70. The gold chart has been forming a bullish ascending triangle over the last 6 months.



ASX Australia
The All Ordinaries lost 23 points to close at 2967 on average volume. The index is still moving sideways, signaling uncertainty. A rise above 3150 will signal a primary trend reversal.
The Slow Stochastic (20,3,3) has crossed to below its signal line, MACD is above, while Twiggs money whipsaws around the zero line.





Orica [ORI]
After reversing from a triangle pattern in 2001, ORI entered a stage 2 up-trend before leveling off in the last 6 months. The stock recently completed an ascending triangle at [2]. Relative strength (price ratio: xao) continues to rise while Twiggs money flow signals sustained accumulation over the last year.





MACD has also formed a triangle over the last 6 months with an upward breakout last week, after respecting the zero line at [$], a bullish signal.





The equivolume chart shows strong distribution at [1] and [2], most likely profit-taking by professional traders ahead of resistance at 10.00. ORI then started to form a series of higher lows at [3] followed by a test of resistance at [4], the longish shadow signaling a fair number of sellers entering the market. Price then formed a narrow congestion pattern below the resistance level, with a failed breakout at [6]. Congestion just below a resistance level is a strong bullish signal, with the stock moving sideways rather than correcting. The second breakout at [8] shows more promise: the longer shadow at [9] shows selling pressure but volume has since dried up. A rally in the next few days, without ORI crossing below support at 10.00, will be a strong bull signal. A rally above support at 9.85 would be a weaker bull signal.





The targeted move for a breakout is 11.40 (9.85 + 9.85 - 8.30).




Short-term: Avoid new entries. The Slow Stochastic and MACD are on opposite sides of their respective signal lines.
Medium-term: Avoid new entries. Use stop losses to protect yourself against a sudden reversal.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs


Thought for the Day:

There is no such thing as failure, only feedback.






Back Issues
Click here to access the Trading Diary Archives.



Perfect Your Market Timing
Learn how to manage your market risk.





The weekly Trading Diary offers fundamental analysis of the
economy and technical analysis of major market indices,
gold, crude oil and forex.
The monthly What's New newsletter covers new articles
on Trading and the Economy, as well as new software updates.




Back Issues
Access the Trading Diary Archives.





 
Top of Page