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Trading Diary
April 22, 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 1.9% to close at 8484 on higher volume. The index appears headed for a test of the upper border of the bullish ascending triangle from the last 4 weeks.
The intermediate trend is down. A rise above 8552 will signal reversal to an up-trend; a fall below 8109 will signal continuation.
March 17th's follow through remains valid (as long as the index holds above 7763).
The primary trend is down; a rise above 9076 will signal a reversal.

The Nasdaq Composite rallied 1.9% to close at 1451.
The break above 1430 signals that the intermediate trend is in an up-trend.
The primary trend is up.

The S&P 500 rallied 19 points to close at 911, signaling that the intermediate trend has reversed to an up-trend.
The primary trend is down; a rise above 954 will signal a reversal.

The Chartcraft NYSE Bullish % Indicator is at 48% (April 18), after completing a Bull Correction buy signal. 

Market Strategy
Short-term: Long if the S&P 500 holds above 904.
Intermediate: Long if the Dow/S&P primary trend reverses upwards; short if the Dow falls below 8109 (S&P: 862).
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.


Federal Reserve
President Bush supports Alan Greenspan for another term as Chairman of the Federal Reserve. (more)

eBay
The Internet auction company posts first-quarter earnings of 32 cents a share, more than double last year. (more)




Gold
New York (18.22): Spot gold eased to $US 332.90.



ASX Australia
The ASX rallied to close up 25 points at 2942. Low volume signals a lack of commitment from buyers. This may improve after the positive performance in the US markets.

MACD (26,12,9) and Slow Stochastic (20,3,3) are above their signal lines; Twiggs Money Flow (21) signals accumulation.




Market Strategy
Short-term: Long if the index rises above 2948 (keep stops tight in case of a false break); short if the index falls below 2888.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the intermediate trend reverses down (below 2888).
Long-term: There is already a bull signal: the March 18 follow through day. Wait for confirmation from the primary trend reversal.


Oil Search [OSH]
A reader asked if I foresee an up-turn in OSH.
The weekly chart shows a long-term down-trend. Note the V-bottom at [A] which broke the trendline before failing at [B] and eventually re-testing support at [C]. The stock now shows equal lows at [C] and [D].

Twiggs Money Flow (100-day) signals distribution, hanging below the zero line.




We now have a broad base from [A] to [C] but there is no sign of a breakout yet.

Relative Strength (price ratio: xao) is well below zero and, despite equal lows at [C] and [D], shows no signs of an up-trend.





The heavy volume on the gap down to a new low at [C] has had a cathartic effect, shaking out the remaining bears.
But equal lows in a down-trend are a weak signal. Only a rise above resistance at [2] will signal a bullish reversal.

It may be prudent to wait even longer: until a pull-back after the breakout - to support at 0.73.

A fall below 0.57 would be a bear signal.





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The weekly Trading Diary offers fundamental analysis of the
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Colin Twiggs


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and a lot of that comes from bad judgment.

- Will Rogers.







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