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Trading Diary
April 11, 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 rallied strongly in early trading but later retreated to close 0.2% down at 8203 on average volume.
The intermediate trend is down. A rise above 8552 will signal a reversal to an up-trend; a fall below 7903 will signal continuation.
Monday 17th's follow through remains valid (as long as the index holds above 7763).
The primary trend is down.

The Nasdaq Composite took a similar route, closing 0.5% down at 1358.
The intermediate trend is down. A rise above the equal highs at 1430 will signal a reversal; a fall below 1336 will signal continuation.
The primary trend is up.

The S&P 500 lost 3 points to close at 868.
The intermediate trend is down, until the index breaks above 904.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator is at 46% (April 10), after completing a Bull Correction buy signal. 

Strategy
Short-term: Go long if the Dow rises above 8552; short if the Dow falls below 7903.
Intermediate: Only go long when the Dow/S&P primary trend reverses upwards; go short if the Dow falls below 7903.
Long-term: There are already two bull signals: the March 17 follow through day and the NYSE Bullish % signal. Wait for confirmation from a Dow/S&P primary trend reversal.


Consumer confidence
The University of Michigan consumer sentiment index recovered to 83.2, from a 10-year low of 77.6 in March. (more)

Retail sales
March retail sales rose 2.1% after a sharp drop in February. (more)

Wholesale prices
Higher energy costs and car prices drove the Producer Price Index up 1.5% in March, sparking fears of inflation. (more)




Gold
New York (15.30): Spot gold closed up at $US 327.20.



ASX Australia
The All Ordinaries formed an inside day, reflecting uncertainty below the long-term downward trendline. The index closed 3 points up at 2908 on average volume.
The intermediate up-trend continues. The upward trendline has been broken so we need to be alert for further signs of weakness. 
The primary trend is down.

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is below; Twiggs Money Flow (21) signals accumulation.





Strategy
Short-term: Go long if the index rises above 2916 (keep stops tight in case of a false break above the long-term trendline); go short if the index falls below 2888.
Intermediate: Go long if the primary trend reverses up (XAO above 3062); short if the intermediate trend reverses down.
Long-term: There is already a bull signal: the March 18 follow through day. Wait for confirmation from the primary trend reversal.


Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 4 (RS is level)
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 1 (RS is level)
  • Consumer Staples [XSJ] - stage 1 (RS is rising)
  • Health Care [XHJ] - stage 4 (RS is falling)
  • Property Trusts [XPJ] - stage 3 (RS is rising)
  • Financial excl. Property Trusts [XXJ] - stage 1 (RS is rising)
  • Information Technology [XIJ] - stage 4 (RS is falling)
  • Telecom Services [XTJ] - stage 4 (RS is falling)
  • Utilities [XUJ] - stage 2 (RS is rising)
The Casinos & Gaming industry shows two excellent performers in Unitab and Jupiters. 
Burswood and TAB may be worth watching.





Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) returned a massive 131 stocks (compared to 99 on August 23, 2002; and 8 on March 14, 2003). The Financial sector is most prominent:
  • Banks (9)
  • REITs (10)
  • Diversified Metals & Mining (6)
  • Agricultural Products (5)
  • Broadcasting & TV (4)
  • Oil & Gas Exploration (5)
  • Diversified Financial (8)
  • Construction Materials (4)


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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.



For further assistance see Understanding the Trading Diary.
Colin Twiggs


We are here to make a choice between the quick and the dead. That is our business.
Behind the black portent of the new atomic age lies a hope which, seized upon with faith, can work out a salvation. 
If we fail, then we have damned every man to be the slave of fear.
Let us not deceive ourselves: we must elect world peace or world destruction.

- Bernard Baruch (1870 - 1965).







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