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Trading Diary
June 6, 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 a gravestone candle, closing 0.2% higher at 9062 on higher volume. The pattern signals short-term weakness and we are likely to see a re-test of the new 9000 support level.
The intermediate trend is up.
The primary up-trend is up.


The S&P 500 briefly flirted with the symbolic 1000 level before retreating to close 3 points down at 987. The index formed a similar reversal pattern to the Dow and is likely to re-test support at 950.
The intermediate trend is up.
The primary trend is up, with the index having broken above the high of [a] on strong volume [c].




The Nasdaq Composite shows a closing price reversal, losing more than 1% to close at 1627.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator climbed to 70.50% on June 5; following a Bull Correction buy signal (April 3).

Market Strategy
Short-term: Long if the S&P 500 is above 1000.
Intermediate: Long if the S&P is above 1000.
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.

Unemployment
Unemployment levels increased to 6.1% in May, but job cuts are below forecasts. (more)




Gold
New York (15.30): Spot gold closed the week down at $US 363.60.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
On the long-term charts, the monthly Coppock indicator has turned up below zero, signaling the start of a bull market. 
MACD has completed a bullish trough above zero. 
Twiggs Money Flow (100) has crossed to above zero after a lengthy period of distribution.




Daily Chart:
After falling through the morning the All Ordinaries rallied to close up 10 points at 3018, but on disappointing 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) crossed to above its signal line; and Twiggs Money Flow (21) signals accumulation.




Market Strategy
Short-term: Long if the All Ords rises above 3018; 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%) is up slightly to 61 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Banks (6)
  • Broadcasting & Cable TV (5)
  • Diversified Financial (4)


Daily Trading Diary
Stocks analyzed during the week were:
  • Kingsgate Consolidated - KCN
  • Sonic Health Care - SHL
  • Bank of Queensland - BOQ
  • Commonwealth Bank - CBA
  • Telecom New Zealand - TEL


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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 have only a second rate brain,
but I think I have a capacity for action.

- Theodore Roosevelt
, one of the most popular US Presidents.







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