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Trading Diary
September 10, 2003

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




USA
The Dow Industrial Average closed down 0.9% at 9420 on low volume, headed for a test of support at 9350.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite gapped down 49 points to close at 1824 on strong volume. The index is likely to re-test support at 1760.
The intermediate trend is up.
The primary trend is up.


 


The S&P 500 fell 12 points to close at 1011 on strong volume. The index broke through the upper edge of the support band but closed just above the lower border, at 1011. A close below 1010 may signal a re-test of support at 960. 
The intermediate trend is up.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator retreated 0.45% to 79.66% (September 10).

Market Strategy
Short-term: Long if the S&P500 is above 1023.
Intermediate: Long if S&P 500 is above 1023.
Long-term: Long is the index is above 960.


Bears maul tech stocks
An earnings revision by Texas Instruments, and downgrades of Nortel and Juniper, spark a sell-off.
(more)


Treasury yields
The yield on 10-year treasury notes closed lower at 4.27%, headed for a re-test of support at 4.20%.
The primary trend is up.





Gold
New York (20.57): Spot gold again tested overhead resistance at 382, before retreating to $379.60.
The primary trend is up.
Price has broken above a symmetrical triangle formed since the start of the year. If gold penetrates overhead resistance at 382, the target is the 10-year high of 420.

ASX Australia
The All Ordinaries closed down 18 points at 3220 on strong volume, signaling the likelihood of a correction back to the long-term trendline.



The intermediate and primary trends are up. 

MACD (26,12,9) has crossed to below its signal line, forming a bearish divergence; Slow Stochastic (20,3,3) has whipsawed below its signal line; and Twiggs Money Flow shows a bearish divergence.



Market Strategy
Short-term: Long above 3238.
Intermediate: Long if the index is above 3160.
Long-term: Long if the index is above 2978.

Challenger [CFG]
Last covered on August 21, 2003.
Challenger formed a broad consolidation in the form of an ascending triangle but failed to break through resistance at 0.57. Price then made a false downward break at [1] before rallying strongly to close above the resistance level for the first time. This proved to be another false break, with heavy selling forcing price back below 0.57.

Relative Strength is level while MACD has made a bullish break of its downward trendline.




Twiggs Money Flow (100) dipped below zero at [1] but has since recovered to signal accumulation.



Equivolume clearly illustrates the false break below 0.50, with fair volume but weak closes, followed by a rally on strong volume at [1]. We again see heavy volume on a rally at [2], but this is met with equally committed selling at [3] and again at [4]. Eventually buyers are overcome and price retreats but not by much; the weak close and strong volume at [5] signal renewed buying pressure and we are likely to see another attempt at the resistance level fairly soon.



A dry up of volume and/or volatility on the correction may present an opportunity for short-term traders. Longer-term traders may be waiting for a pull-back, following a breakout, that respects 0.57.
A close below 0.50 would be bearish, while a close below 0.48 would be a stronger signal.


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


Remember that the stock market is manic-depressive.

~ Warren Buffet.




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