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Trading Diary
June 26, 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, signaling uncertainty. The index closed 0.7% up at 9079 on lower volume; above the 9000 support level.
The intermediate trend is up.
The primary up-trend is up.

 


The S&P 500 rallied 10 points to close at 985.
The intermediate trend is up. The index may be forming equal lows (the first low on June 9); a bullish sign in an up-trend. 
The primary trend is up.

The Nasdaq Composite rallied 2.0% to close at 1634.
The intermediate trend is up. Equal lows on the 9th and 24th of June are a bullish sign.
The primary trend is up.

The Chartcraft NYSE Bullish % Indicator is 0.86% from its peak, at 74.36% on June 25.

Market Strategy
Short-term: Long if the S&P 500 is above 986 (the day's high).
Intermediate: Long if the S&P is above 992.
Long-term: Long.


Jobless claims fall
New claims for unemployment benefits last week fell to a 3-month low of 404,000.
(more)

Is the Fed running out of ammunition?
The current one per cent overnight rate does not leave the Fed with much leeway if the economy does not respond.
(more)




Gold
New York (17.10): Spot gold has fallen to $US 343.90.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
I have been surprised by the severity of the correction, with the All Ordinaries closing sharply lower at 2997 on higher volume, breaking the primary supporting trendline.
The intermediate trend is down.
The primary trend is up. If price holds above support at 2970 this will indicate that the up-trend is still strong. A fall to 2900 will signal weakness.

The monthly Coppock indicator has turned up below zero, signaling the start of a bull market. 
Twiggs Money Flow (100) signals accumulation.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is below; Twiggs Money Flow (21) signals accumulation.




Market Strategy
Short-term: Long if the All Ords is above 3032 (Wednesday's high).
Intermediate: The primary trend has reversed up; Long if the All Ords is above 3050.
Long-term: The primary trend reversal has confirmed the March 18 follow through signal. Long.


Double Tops
Both Westpac [WBC] and St George [SGB] have completed similar equal highs in the last two weeks.

Westpac formed a new high at resistance at [1], but on moderate volume.
The correction at [2] was accompanied by strong volume which then dried up at [3].
Price then re-tested the low at [4] before a weak rally to [5].



St George made a new high (a few days after WBC) at [1].
It then followed a similar pattern: gapping down on strong volume at [2]; re-testing the low at [3]; before a weak rally to [4].
Volume dropped off at [5] and SGB has again retreated.



Equal highs in an up-trend are not a strong signal unless they complete a double top pattern, with a break below the intervening trough. Most resolve into ascending triangle patterns, and end with a continuation of the up-trend.

Westpac: A break below 16.04 would be bearish; a rise above 16.85 bullish.
St George: A break below 21.16 would be bearish; a rise above 22.00 bullish.


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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


It is said an Eastern monarch once charged his wise men
to invent him a sentence to be ever in view,
and which should be true and appropriate in all times and situations.
They presented him the words: 'And this, too, shall pass away.' 
How much it expresses! How chastening in the hour of pride!
How consoling in the depths of affliction!

~ Abraham Lincoln: September 1859.



 
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