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Trading Diary
May 29, 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 0.9% to close at 8711 on higher volume.
The intermediate trend is up.
The primary trend is down; a close above 9076 will signal a reversal.

After an early rally the S&P 500 corrected downwards, closing 4 points lower at 949; below resistance at [a].
The intermediate trend is up.
The primary trend is down; a close above 954 [a] will signal an up-trend.




The Nasdaq Composite fared better, retreating after an early rally but holding above the open; up 0.7% at 1574.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator climbed to 63.98% on May 28; 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.

GDP growth
GDP growth for the first quarter was revised upwards to 1.9%, from an initially reported 1.6%. (more)




Gold
New York (16.45): Spot gold has rallied to $US 369.30.
On the five-year chart gold has respected the long-term upward trendline.



ASX Australia
The All Ordinaries rallied to 2990 before closing back at the 2984 resistance level; up 8 points on strong volume.
The intermediate trend is up.
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 rises above [b] at 2984; 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.


Symex [SYM]
Last covered on May 19, 2003.
SYM broke above resistance at [c] and proceeded to rally strongly. Price has now corrected sharply.
Twiggs Money Flow (100) is rising.




On the daily chart, we can see the latest rally start at [3] after a short pull-back to the support line.
Price starts gapping up, culminating in a strong closing price reversal at [4]: price gapped up strongly at the opening but then retreated to close near the previous high.

Relative Strength (price ratio: xao) is rising; MACD (26,12,9) and Twiggs Money Flow (21) are bullish.





Heavy selling is evident on the equivolume chart, with weak closes and high volume at [7] and [8]. 
Short-term traders may have moved their stop-loss below the low of [8] after the reversal signal.
Those with a longer-term view may still have their stops below the low of [5] or [6].





There is strong volume on the correction at [9]. If this continues it may result in a breach of the support level.

If volume dries up in the next few days, the pull-back is likely to respect support at 0.87; and consolidate before another rally.


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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.
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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


"You see", he explained, "I consider that a man's brain originally is like a little empty attic,
and you have to stock it with such furniture as you choose.
A fool takes in all the lumber of every sort that he comes across,
so that the knowledge which might be useful to him gets crowded out,
or at best is jumbled up with a lot of other things
so that he has a difficulty in laying his hands upon it.
Now the skilful workman is very careful indeed as to what he takes into his brain-attic.
He will have nothing but the tools which may help him in doing his work,
but of these he has a large assortment, and all in the most perfect order.
It is a mistake to think that that little room has elastic walls and can distend to any extent.
Depend upon it there comes a time when for every addition of knowledge
 you forget something that you knew before.
It is of the highest importance, therefore,
not to have useless facts elbowing out the useful ones."

- Sir Arthur Conan Doyle: Sherlock Holmes, in A Study in Scarlet



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