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Trading Diary
May 28, 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
In a volatile day the
Dow rallied early before retreating to close slightly higher at 8793 on strong volume.
The intermediate trend is up.
The primary trend is down; a close above 9076 will signal a reversal.

The S&P 500 rallied to 959 but then retreated to close 2 points higher at 953, below resistance at the high of [a].
The intermediate trend is up.
The primary trend is down; a close above 954 will signal an up-trend.




The Nasdaq Composite fared slightly better, gaining 0.4% to close at 1563.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator rose to 63.24% on May 27; following a Bull Correction buy signal (April 3).


Market Strategy
Short-term: Long if the S&P 500 rises above 954.
Intermediate: Long if the primary trend reverses up (S&P closes above 954).
Long-term: There are already two bull signals: the March 17 follow through day and the April 3 NYSE Bullish % signal. Go long if the S&P 500 primary trend turns upwards.

Economy still in a "soft patch"
San Francisco Fed President Robert Parry says: "the economy is still mired in the soft patch we hit last fall" but should experience a "modest pickup" in the second half of the year. Some economists believe that a further rate cut may be necessary to boost the recovery. (more)




Gold
New York (17.28): Spot gold eased further, to $US 363.70.
On the five-year chart gold has respected the long-term upward trendline.



ASX Australia
The All Ordinaries rallied on strong volume, closing up 25 points at 2976.
The intermediate trend reversed back up, with a rise above 2973.
The primary trend is down. A rise above 3062 will signal an up-trend.

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





Market Strategy
Short-term: Long if the All Ords is above 2973; short if the XAO falls below 2908.
Intermediate: Long if the primary trend reverses up ( crosses above 3062 ); short if the XAO is below 2908.
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.


Fairfax [FXJ]
Last covered on May 28, 2002.
FXJ is forming a stage 1 base after a lengthy down-trend.
Twiggs Money Flow (100) has risen above zero, signaling accumulation, after a bullish divergence.




On the daily chart, FXJ has formed a double bottom at [5] and [7] after an earlier low at [1].
The weak closes at [5] and [7] on high volume signal accumulation.
Overhead resistance is strong, with levels at 3.10 [6], 3.20 [4] and 3.30 [2].
The latest rally shows a weak close at [8] on moderate volume; a sign that price may re-test support at 2.80.

Relative Strength (price ratio: xao) is level but MACD is rising; Twiggs Money Flow (21) signals accumulation.





A rise above 3.10 will be a bull signal for short-term trades; while a rise above 3.30 will be a long-term bull signal.
A close below 2.80 will be bearish.


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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.



Understanding the Trading Diary has been expanded to offer further assistance to readers.

Colin Twiggs


I believe a leaf of grass is no less
 than the journeywork of the stars.

- Walt Whitman



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