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Trading Diary
August 28, 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 .

The Dow gained 0.4% to close at 9374. Low volume signals weakness.
The intermediate trend is up. MACD has completed a bearish divergence.
The primary trend is up.

The Nasdaq Composite fared better, gaining 18 points to close at 1800, on higher volume.
The intermediate trend is up.
The primary trend is up.


The S&P 500 closed up 6 points at 1003. Continued low volume signals weakness.
The intermediate trend is down.
The primary trend is up.

The Chartcraft NYSE Bullish % Indicator is almost unchanged at 77.00% (August 27).

Market Strategy
Short-term: Long if the S&P500 is above 1000. Short if below 991.
Intermediate: Long if S&P 500 is above 1015. Short if below 960.
Long-term: Long is the index is above 960.

Jobless rise
New unemployment claims increased to 394,000 last week. (more)

Treasury yields
The yield on 10-year treasury notes is lower at 4.43%.
The intermediate and primary trends are both up.

New York (17.56): Spot gold held steady at $369.40.
The primary trend is up. 
A bullish ascending triangle is forming, with resistance between 370 and 380. 
The target for a breakout is the 10-year high of $420: 370 + 370 - 320.

ASX Australia
The All Ordinaries climbed 19 points to close at 3197 on heavy volume. We need to be wary of heavy volume in a long-established trend as it often precedes a correction, as at [1].

The intermediate and primary up-trends are up.
MACD (26,12,9) has whipsawed back above 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 3187. Short if the intermediate trend reverses.
Intermediate: Long if the index is above 3187.
Long-term: Long if the index is above 2978 .

Australian Dollar
The Aussie has fallen below US$ 0.65, a bear sign.

We will continue with gold stocks:

Newcrest [NCM] was last covered on August 12, 2003.
Price broke out of a rectangular trading range in June. The target is 9.50 (7.50 + 7.50 - 5.50).
Twiggs Money Flow (100) signals accumulation but has started to decline since the breakout, forming a bearish divergence.
Relative Strength is rising, while MACD has completed a bullish trough above zero.

Oxiana [OXR] was last covered on August 12, 2003.
Price broke out of a symmetrical triangle in July. The target is 0.765 (0.60 + 0.63 - 0.465).
Twiggs Money Flow (100) signals strong accumulation but has lately started to decline, displaying a bearish divergence.
Relative Strength is rising and MACD is bullish.

Sons of Gwalia [SGW] was last covered on August 18, 2003.
Price formed a stage 1 base with a large ascending triangle. The target is 4.24 (2.80 + 2.80 - 1.36).
Twiggs Money Flow (100) has climbed strongly to signal accumulation; MACD has completed a bullish trough above zero; and Relative Strength is rising.

SGW pulled back sharply at [1] to test the new support level. Volume was high but a weak close signaled buying support.
Low volume on the false break below 2.80 at [2] signaled a lack of selling pressure and increased the likelihood that the support level would hold.
A surge of volume on the inside day at [3] signals an inability to move prices despite heavy volume and we may see another re-test of support. 

A dry-up of volume and/or volatility on pull-backs will be a bull signal. A break above 3.25 will add further confirmation.
A close below 2.80 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.

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Colin Twiggs

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~ Warren Buffett.

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