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Trading Diary
May 30, 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 1.6% to close at 8850 on above-average volume.
The intermediate trend is up.
The primary trend is down; a close above 9076 will signal a reversal.

The S&P 500 rallied strongly, closing 14 points higher at 963; and breaking above the 954 resistance level from [a].
The intermediate trend is up.
The primary trend closed above 954 [a], signaling the start of an up-trend.




The Nasdaq Composite gained 1.33% to close at 1595.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator is rising steeply, reaching 65.00% on May 29; following a Bull Correction buy signal (April 3).

The yield differential between 10-year treasury notes and 13-week t-bills is a healthy 2.0% plus; a bullish sign for the economy. A negative yield differential is a strong bear signal; as can be seen from the S&P 500 plotted on the chart below.





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

Manufacturing increase
The National Association of Purchasing Management says that its Chicago-region manufacturing index for May has jumped to 52.2 from 47.6, well above expectations. (more)




Gold
New York (15.30): Spot gold closed down at $US 364.10.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
The monthly Coppock indicator has turned up below zero, signaling the start of a bull market, while the XAO has broken above the downward trendline.





The All Ordinaries closed down at 2980, failing to break above the 2984 resistance level - on strong volume.
The intermediate trend is up.
The primary trend is down. A close above 3050 will signal an up-trend.

MACD (26,12,9) is 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 ( closes above 3050 ); 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.


Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 1 (RS is level)
  • Materials [XMJ] - stage 3 (RS is falling)
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 1 (RS is level)
  • Consumer Staples [XSJ] - stage 1 (RS is level)
  • Health Care [XHJ] - stage 4 (RS is falling)
  • Property Trusts [XPJ] - stage 2 (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 level)
  • Utilities [XUJ] - stage 2 (RS is rising)


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) eased to 57 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • REITs (5)
  • Diversified Financial (4)
  • Gold (3)
  • Banks (3)
  • Broadcasting & Cable TV


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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


Life is like the Olympic games;
a few men strain their muscles to carry off a prize,
others sell trinkets to the crowd for a profit;
some just come to see how everything is done.

- Pythagoras (569 - 475 B.C.)



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