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Trading Diary
July 15, 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 0.5% to 9128. Higher volume on the decline is a bearish sign, as are the two equal highs below the previous high.
The intermediate trend is up. A decline below 8978 will signal a down-turn.
The primary trend is up.

The S&P 500 lost 3 points to close at 1000.
The intermediate trend is up. A fall below 962 will signal a down-turn.
The primary trend is up.



The Nasdaq Composite closed almost unchanged at 1753.
The intermediate trend is up. Positive results from Intel should boost the index on Wednesday.
The primary trend is up.

The Chartcraft NYSE Bullish % Indicator is up at 76.38% on July 14.

Market Strategy
Short-term: Long if the S&P 500 is above 1015. Short if the index falls below 983.
Intermediate: Long if the S&P is above 1015. Short if the index falls below 962.
Long-term: Long.


Intel doubles 2Q profits
The chip-maker reported strong sales and earnings of 14 cents a share, compared to 7 cents a year ago.(more)

Greenspan
The Fed Chairman plays down the use of unconventional policy measures, such as purchasing long-term treasury bonds, sending bond yields to a 10-week high.(more)




Gold
New York (18.20): Spot gold has fallen to $US 342.10.
Gold is above the long-term upward trendline on the five year chart.



ASX Australia
The All Ordinaries encountered some selling pressure but managed to gain a further 8 points to close at 3061 on strong volume.
The intermediate trend is up.
The primary trend is up.

MACD (26,12,9) has crossed to above its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (21) signals accumulation.



Market Strategy
Short-term: Long if the All Ords is above 3066. Short if below 2978.
Intermediate: The primary trend is up; Long if the All Ords is above 3066.
Long-term: Long.


Havey Norman [HVN]
Last covered on June 19,2003.
The stock has completed an inverted head and shoulders reversal, with the second shoulder respecting the 2.40 support level before rallying to a new high.
 
Twiggs Money Flow (100-day) signals accumulation.



MACD has formed a bullish trough above zero [+], after an earlier bullish divergence.



Relative Strength (price ratio: xao) has made a second 3-month high. 


Equivolume shows that the initial breakout above 2.40 was on fairly thin volume. 
Strong selling pressure is evident on the corrections at the end of May and mid-June [1]. 
The subsequent pull-back was fairly short (5 days) but on heavy volume. The false break below support at [2] is a bullish sign: strong volume and a weak close above the support level.
Rallies to [4] were short but we then witness a dry-up of volume on the correction and narrow ranges at [5] and [6]. These present entry opportunities: place a buy-stop above the high and a stop-loss below 2.40 (less than 5% from the entry point).



Price has since rallied strongly to [7]. If the pull-back is short and respects support at the high of [4], this will signal a strong up-trend.
Further bullish signs would be a dry-up of volume and volatility on the correction.

A fall below 2.40 would be bearish. 


Perfect Your Market Timing
Learn how to manage your market risk.





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


Those who lament their misfortunes are generally they
who do not recognize their opportunities.

~ Wall Street maxim 
S.A. Nelson: The ABC of Stock Speculation (1902).



 
Stock Screens: MACD

An MACD trough that respects the zero line is a strong bull signal. To highlight MACD troughs above zero:

(1) Select ASX 200 from Indices and Watchlists and 200 as the Maximum Return;
(2) Select Bull Signal on MACD (26,12,9) above/below Zero;
(3) Enter 9999 as the time period; 
(3) Submit;
(4) Sort the Return by clicking on the MACD header.

Stocks with the highest MACD readings (normally >60 days) will have respected the zero line.





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