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Trading Diary
May 14, 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 retreated 0.4% to close at 8647 on average volume.
The intermediate trend is up.
The primary trend is down; a rise above 9076 [a] will signal a reversal.





The S&P 500 lost 3 points to close at 939.
The intermediate up-trend continues.
The primary trend is down; a rise above 954 will signal an up-trend.

The Nasdaq Composite lost 0.3% to close at 1534.
The intermediate trend is up.
The break above 1521 provides clear confirmation that the index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator continues to climb, reaching 59.47% on May 13, following a Bull Correction buy signal on April 3. 

Market Strategy
Short-term: Long if the S&P 500 is above 947; short if the S&P intermediate trend reverses down (or falls below 898).
Intermediate: Long if the Dow/S&P primary trend turns upwards; short if the intermediate trend (S&P) reverses down.
Long-term: There are already two bull signals: the March 17 follow through day and the April 3 NYSE Bullish % signal. Wait for confirmation from a Dow/S&P primary trend reversal.




Gold
New York (17.56): Spot gold is back up at $US 352.30.
On the five-year chart gold has respected the long-term upward trendline.



ASX Australia
The All Ordinaries lost 9 points to close at 2952 on average volume.
The intermediate up-trend is weak; a close below 2909 will signal a reversal.
The primary trend is down. A rise above 3062 will signal an up-trend.

MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) has crossed to above; Twiggs Money Flow (21) is weakening.





Market Strategy
Short-term: Short if the XAO is below 2939.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the intermediate trend reverses down (falls below 2909).
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.


Telecom New Zealand [TEL]
TEL is building a broad stage 1 base, from [4] to [13], after a lengthy stage 4 down-trend.
The stock made a marginal break below support at [13] before rallying to test resistance at 4.40.

Twiggs Money Flow (100-day) signals strong accumulation.





Relative Strength (price ratio: xao) is rising; MACD and Twiggs Money Flow (21-day) are bullish.

The equivolume chart shows that TEL made several tests of resistance at 4.30, from [b] to [e], before price gapped up at [f].
The pull-back to [g] shows signs of ending and there may be entry opportunities (short-term) if TEL rises above 4.41.





Even if price pulls back further, there may still be entry opportunities provided that:
  • the pull-back is short;
  • on low volume; and
  • respects support at 4.30.
A break below 4.30 would be bearish.

Longer-term traders may prefer to wait for a break above resistance at 4.60.


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The weekly Trading Diary offers fundamental analysis of the
economy and technical analysis of major market indices,
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Colin Twiggs


Millions saw the apple fall, 
but Newton was the one who asked why.

- Bernard Baruch.



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