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Trading Diary
August 25, 2003

These extracts from my daily trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use .




USA
The Dow closed below the new 9350 support level, down 0.3% at 9318. Volume is reassuringly low.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite lost 1 point to close at 1764, after a false break above the previous high [a]. Volume is, again, reassuringly low. 
Equal highs in an up-trend are not particularly bearish - unless the index falls below the intervening low of 1640.
The intermediate trend is up.
The primary trend is up.


 


The S&P 500 closed up 1 point at 994 on lower volume.
The intermediate trend is down.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator closed last week at 76.71% (August 22).

Market Strategy
Short-term: Long if the S&P500 is above 1011. Short if below 988.
Intermediate: Long if S&P 500 is above 1015. Short if below 960.
Long-term: Long is the index is above 960.


Dollar weakens against yen
The Nikkei's rise to a one year high is fuelling a switch from dollars to yen. (more)

Treasury yields
The yield on 10-year treasury notes closed up at 4.53%, ranging in a narrow band.
The intermediate and primary trends are both up.




Gold
New York (20.27): Spot gold eased a dollar to $361.60.
The primary trend is up.



ASX Australia
The All Ordinaries retreated 5 points to close at 3175 on lower volume.



The intermediate and primary trends are up.
Slow Stochastic (20,3,3) is above its signal line; MACD (26,12,9) is above; 
Twiggs Money Flow signals accumulation.


Market Strategy
Short-term: Long if the All Ords is above 3182. Short if the intermediate trend reverses.
Intermediate: Long if the index is above 3182.
Long-term: Long positions if the index is above 2978 .

Diversified Metals & Mining
Stocks in this sector have recently featured strongly in the weekly stock screen that I do on % Price Move (1 month).

BHP Billiton [BHP] has formed a broad double bottom, recently completed with a break out above the neckline.
Twiggs Money Flow (100) has risen above zero, to signal accumulation, after breaking its downward trendline.
Relative Strength threatens to make a new 2-year high, while MACD is bullish.



Centennial Coal [CEY] broke out of a bullish ascending triangle. 
Relative Strength has made a new 2-year high. 
Traders should be alert for a pull-back to the new support level at 2.40 which may present entry opportunities.



Iluka Resources [ILU] has formed a base in the shape of an ascending triangle. Consolidation just below the 4.40 resistance level for the past 7 weeks is a bullish sign.
Relative strength appears to be moving sideways, forming a base, while Twiggs Money Flow (100) has crossed to above zero and then pulled back to the zero line. MACD shows a bullish trough [+] above the zero line.



Jubilee Mines [JBM] shows a fast up-trend after breaking out of a broad ascending triangle base at the beginning of the year.
The up-trend has now rolled over into what promises to be a sharp correction, judging from the strong bearish divergence [-] on Twiggs Money Flow (100).
MACD and Relative Strength have both turned down after a large spike.



Portman Mining [PMM] has started a stage 2 rally after completing a double bottom. Many traders will be hoping for a pull-back to the new 1.20 support level to provide further entry opportunities.
Relative Strength and Twiggs Money Flow (100) are rising, while MACD is also bullish. 



Rio Tinto [RIO] formed a head and shoulders at [A], [C] and [E] but has respected the supporting neckline at 29.00. The trend is weakening with a far shorter rally from [D] to [E], compared to the earlier [B] to [C]. The acid-test will be the resistance level at the high of [E]. Failure to breach this level will be a strong bear signal and is likely to result in a fall below 29.00.
Twiggs Money Flow and Relative Strength appear to contradict this, making new 3-month highs, while MACD formed a bullish trough above zero; so we shall have to adopt a wait-and-see attitude until price reaches 35.00.



Sims Metal [SMS] is in a strong stage 2 up-trend.
Relative Strength has made a new 3-month high while MACD is bullish.
Twiggs Money Flow, however, shows a bearish divergence; so we need to be on the alert for a secondary correction. 



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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


Every organism has one and only one central need in life, to fulfill its own potentialities.

~ Rollo May: Man's Search For Himself.





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