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Incredible Charts version 4.0.2.300
The new version should be released this weekend. Changes include a revised watchlist and securities menu, enabling the addition of ETOs, warrants and US stocks, and a new printer module, with greater printer compatibility and functionality.




Trading Diary
August 20, 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 to 9398 on lower volume, down 0.3%.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite closed unchanged at 1761 on lower volume.
The intermediate trend will turn back up if the index rises above 1776.
The primary trend is up.


 


The S&P 500 retreated to close at 1000 on lower volume.
The intermediate trend will reverse up if the index rises above 1015.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator is at 75.92% (August 19).

Market Strategy
Short-term: Long if the S&P500 is above 1005. 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.


Bonds lower, dollar up
Treasury yields rise, sending the dollar higher against the euro but failing to make gains against the yen. (more)


Treasury yields
The yield on 10-year treasury notes rose to 4.44%.
The intermediate and primary trends are both up.




Gold
New York (17.56): Spot gold has rallied almost 5 dollars to $366.00.
The primary trend is up.



ASX Australia
The All Ordinaries gained 3 points to close at 3168. The weak close on high volume signals selling pressure.
The intermediate trend is up. A fall below 2978 would signal a reversal.
The primary trend is up.

Slow Stochastic (20,3,3) has crossed to above its signal line; MACD (26,12,9) is above; Twiggs Money Flow continues to decline.
MACD and Twiggs Money Flow (21) both show bearish divergences.



Market Strategy
Short-term: Long if the All Ords is above 3178. Short if the intermediate trend reverses.
Intermediate: Long if the index is above 3178.
Long-term: Long if the index is above 2978 .

Great Southern Plantations [GTP]
Correction: The target for the pennant was 1.35 and not 1.25: 1.19 + (1.24 - 1.08). The target has already been reached.

Adelaide Brighton [ABC]
Last covered on July 30, 2003.
ABC is in a stage 2 up-trend, with Twiggs Money Flow (100) signaling accumulation.



Price recently corrected back sharply towards the supporting trendline, reminiscent of early March 2003.
MACD and Relative Strength both record the down-turn but are still bullish.



The March correction showed a long tail after price had made a lower short-term high 2 days earlier. Price then gapped down over the next few days, to test the supporting trendline. 
The more recent breakout above 1.30 at [2] was accompanied by strong volume. After a brief test of support, price then rallied to above 1.50.
An early warning of the reversal is the distribution on the day before [3], where price did not move on strong volume.
After the high, price paused briefly for two days on low volume, before falling sharply at [4].
The following day shows buying support, with a weak close on strong volume.



Short-term traders should be alert for signs of a reversal above the supporting trendline or consolidation above support at 1.30. Both may present entry opportunities.
A close below the supporting trendline would be bearish.


Computershare [CPU]
Last covered on August 4, 2003.
CPU has formed a broad stage 1 base, with a double bottom at [a] and [h].
Twiggs Money Flow (100) signals accumulation despite a recent bearish divergence.



Price recently completed a bullish ascending triangle, with Relative Strength rising.



The target for the breakout is the overhead resistance at 2.35: 2.00 + 2.00 - 1.65.
MACD has completed a second bullish trough [+] above zero.



The daily volume chart shows a bear trap at [4], with volume drying up on a break below the supporting trendline, before a sharp rally through resistance at [5] on higher volume.



We now see the start of a pull-back to test support at 2.00.
This may present entry opportunities if price holds above the support level.
A close below 2.00 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


All you have to do to diminish your fear
is to develop more trust in your ability
to handle whatever comes your way!

~ Susan Jeffers: Feel The Fear And Do It Anyway.




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