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Trading Diary
August 19, 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
Apologies for the mystery spike on yesterday's DJIAA. We are still waiting for an explanation from our data suppliers but they have adjusted the chart to reflect a high of 9419. I should have been aware that the DJIAA (actual) can never have a higher high or lower low than the DJIA (theoretical). Further detail can be found on the indexes help page. 

The Dow has held above support at 9350 on higher volume, closing 0.2% up at 9429.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite rallied a further 22 points to close at 1761 on higher volume.
The intermediate trend will turn back up if the index rises above 1776.
The primary trend is up.


 


The S&P 500 gained a further 2 points to close at 1002 on higher volume.
The intermediate trend will reverse up if the index rises above 1015.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator rallied to 75.92% (August 19).

Market Strategy
Short-term: Long if the S&P500 is above 1000. Short if below 980.
Intermediate: Long if S&P 500 is above 1015. Short if below 960.
Long-term: Long if the index is above 950.


HP misses target
HP returns to profit, posting earnings of 10 cents per share, but fails to meet analysts expectations. (more)

Consumer confidence
The University of Michigan index of consumer sentiment recorded a fall to 90.2 from 90.9 in July. (more)

Treasury yields
The yield on 10-year treasury notes retreated back to 4.36%.
The intermediate and primary trends are both up.




Gold
New York (18.15): Spot gold rallied 350 cents to $361.70.
The primary trend is up.



ASX Australia
The All Ordinaries rallied early but strong selling pressure forced a weak close, 7 points higher at 3165.
The intermediate trend is up. A fall below 2978 would signal a reversal.
The primary trend is up.

Slow Stochastic (20,3,3) is below its signal line; MACD (26,12,9) is above; Twiggs Money Flow signals accumulation.
MACD and Twiggs Money Flow (21) continue to show bearish divergences.



Market Strategy
Short-term: Long if the All Ords is above 3165. Short if the intermediate trend reverses.
Intermediate: Long if the index is above 3165.
Long-term: Long if the index is above 2978 .

Great Southern Plantations [GTP]
The weekly chart of GTP shows past volatility, with fast rallies and some sharp corrections. Price has recently made a new 2-year high but will the rally be able to sustain itself?
Twiggs Money Flow (100) signals strong accumulation, while Relative Strength and MACD are rising fast.



The latest rally has accelerated away from the supporting trendline, with a wide-ranging day [3] measuring more than 2.0 on Jack Schwager's Volatility Ratio, followed by a continuation gap on Tuesday.



Price formed a pennant from [p] to the breakout at [3], but the target of 1.25 has already been reached: 1.09 + (1.24 - 1.08).



Short-term traders may find a trailing stop of 6 or 8 per cent useful to lock in profits, but this must be calculated on intra-day highs/lows.
Re-enter (on buy signals) when price returns to the supporting trendline.
A close below the supporting trendline would be a bear signal.

Sons of Gwalia [SGW]
Last covered on August 18, 2003.
SGW fell after reporting a 40% drop in earnings, but recovered to close above the 2.90 support level on strong volume. (more)
The false break below support may have triggered many traders stops.



Consolidation above 2.90 may present further entry opportunities.
A close below the support level would be bearish.


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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


The trend is your friend except at the end when it bends.

~ Ed Seykota.




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