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Market Statistics

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New Highs/Lows, Advances/Declines and Advance/Decline Volume.



Trading Diary
March 17, 2003

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 staged a follow-through day, with the index jumping 3.6% to 8141 on higher volume. This is just a large correction at this stage, albeit on strong volume: the intermediate cycle is down.
The primary trend is down.

The Nasdaq Composite follow-through day surged 3.9% to close at 1392. The large correction does not alter the intermediate trend, which is still down.
The primary trend is up; a fall below 1108 will signal a reversal.

The S&P 500 staged a similar rally, up 29 points at 862.
The intermediate trend is down - until there is a higher low followed by a further high.
The primary trend is down; the next support level is at 768.

The Chartcraft NYSE Bullish % Indicator is at 36% (March 14).


War rally
The market rallies as the US and its allies decide not to seek a further resolution from the UN security council, making war with Iraq inevitable. (more)

Dollar rallies
The US dollar improves to 0.94 Euros, while bond yields rise and oil prices fall. (more)




Gold
New York (19.45): After surging to 345.00 spot gold fell back to $US 337.90.



ASX Australia
The All Ordinaries eased 13 points to close at 2711. Lower volume and strong overnight performance in the US markets increase the likelihood of a further rally. The intermediate and primary trends are down.

MACD (26,12,9) threatens to cross its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (21) signals distribution.





Caltex Australia [CTX]
Last covered on November 27, 2002.
Caltex has been in a slow up-trend since a V-bottom in October 2001. The secondary reaction back to the supporting trendline at [C] was followed by a strong rally to [D], before the present correction back to the trendline.

Relative Strength (price ratio: xao) is rising, while MACD and Twiggs Money Flow are bearish. 





The lack of volume on the peak at [D] is a strong reversal signal on the daily chart. Higher volume on down-days at [E] and [F] signal further weakness.
If price is to hold above the supporting trendline we should see a dry up of volume and narrow ranges on the down-days and increases on the up-days; the opposite of the present pattern.
A break below the supporting trendline would be a bear signal, strengthened if CTX falls below support at 1.83.





Stock Screens: 3-month High
Westpac [WBC] and Bank of Queensland [BOQ] are in lengthy consolidations. UniTab [UTB] has formed a new high in a slow up-trend. SFE has formed an unstable V-bottom while Symex [SYM] is in a broad base.


Stock Screens: MA Crossovers (100,5)
Bearish crossovers in the ASX 200 included seven Real Estate Trusts: CEP, MGR, IIF, MCW, AIP, MGI and GPT. The steel industry was also represented by BHP Steel [BSL] and Onesteel [OST].


Bristile [BRS]
Last covered on March 13,2003.
Bristile is subject to a takeover offer from Brickworks Limited [BKW] at $3.15 per share and shareholders are also due to receive a 9 cent interim dividend; so BRS is unlikely to fall below $3.24 per share until the ex-date of April 1st, 2003.


Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Long if the All Ords rises above 2732. Slow Stochastic and MACD are on opposite sides of their respective signal lines.
Medium-term: Avoid new entries.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs


War's climate of danger, exertion, uncertainty, and chance also demands other intellectual qualities:

Presence of mind . . .
is nothing but an increased capacity of dealing with the unexpected.

- Claus von Clausewitz: "On War"







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