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Trading Diary
June 3, 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 formed an inside day, closing up 0.3% at 8922 on lower volume. We may see a short correction before another attempt at the 9000 resistance level.
The intermediate trend is up.
A close above 9000 will signal the start of a primary up-trend.

The S&P 500 formed an inside day, signaling uncertainty. The index closed up 4 points at 971.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite gained 0.8% to close at 1603 but still looks weak after Monday's closing price reversal.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator continues to rise, reaching 68.13% on June 2; following a Bull Correction buy signal (April 3).

Market Strategy
Short-term: Long if the S&P 500 is above 979.
Intermediate: Long if the S&P rises above 979 - the primary trend has turned upwards (S&P above 954).
Long-term: Long - the S&P 500 primary trend has turned upwards after two bull signals: the March 17 follow through day and the April 3 NYSE Bullish % signal.

IBM Blues
The SEC investigation of accounting practices in a minor retail stores unit of IBM should have no material impact on earnings but may unsettle investors. (more)




Gold
New York (17.57): Spot gold is almost unchanged at $US 365.00.
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 long-term downward trendline.
The All Ordinaries closed down 12 points at 2992 on strong volume, highlighting short-term weakness.
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, having completed a bullish trough above zero at [+]; Slow Stochastic (20,3,3) has crossed below its signal line; and Twiggs Money Flow (21) is falling.




Market Strategy
Short-term: Long if the All Ords rises above 3013; 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.


Bank of Queensland [BOQ]
Last covered on April 21, 2003.
After a period of consolidation BOQ has trended strongly upwards over the last 2 months
Volume has declined in recent weeks and Twiggs Money Flow (100) has not yet managed to break above zero.
Relative Strength (price ratio: xao) and MACD (26,12,9) are rising fast.




Twiggs Money Flow (21) still looks tentative, edging just above zero.

The trend is still fast, with short pull-backs, most of which hold above the preceding peak.




You can also see the dry-up of volume on the pull-backs at [1], [2], [3], [4] and [6] on the equivolume chart.
But the long shadow at [5], on reasonable volume, shows some profit-taking as the trend progresses.




The stock has trended strongly for two months now and it would not be a good time to take new entries; the further the rally goes the greater the likelihood of a correction.
Traders who are already long should consider locking in profits with tighter stops. It may not be time to sell yet but at some point the stock is likely to lose momentum, followed by a correction back to the long-term trendline.


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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


Never give in - never,
never, never, never,
in nothing great or small,
large or petty, never give in
except to convictions
of honor and good sense.
Never yield to force;
never yield to the apparently
overwhelming might of the enemy.

- Winston Churchill: speech made October 1941
to the boys at Churchill's old public school, Harrow.


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