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Trading Diary
September 18, 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 Industrial Average rallied 1.2%, breaking through resistance to close at 9659.
The intermediate trend is up. Continued low volume signals weakness.
The primary trend is up.



The Nasdaq Composite rallied 27 points to close at 1910 on strong volume.
The intermediate trend is up.
The primary trend is up.


 


The S&P 500 rallied 14 points to close at 1040 on higher volume.
The intermediate trend is up.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator has made a new high of 80.89% (September 18).

Market Strategy
Short-term: Long if the S&P500 is above 1032.
Intermediate: Long if S&P 500 is above 1032.
Long-term: Long if the index is above 1015.


Jobless claims lower
New unemployment claims fell to 399,000 for last week. (more)

Treasury yields
The yield on 10-year treasury notes closed lower at 4.18%, below support at 4.20%.
There is a further band of support below, at 4.00 to 4.10, so I do not yet expect a re-test of the previous lows.
The intermediate and primary trends are both up.




Gold
New York (20.22): Spot gold has rallied to $376.40.
The primary trend is up.
Price has broken above a symmetrical triangle formed since the start of the year. If gold rises above resistance at 382, the target is the 10-year high of 420.


ASX Australia
The All Ordinaries rose slightly, gaining 3 points to close at 3225. Strong volume signals selling pressure ahead of resistance at 3238 to 3250. Failure to break through resistance will signal further consolidation.



The intermediate trend is up but the index has broken its upward trendline.
The primary trend is up. 

MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) has crossed to above; 
Twiggs Money Flow is above zero, after a bearish divergence.

Market Strategy
Short-term: Long if the All Ords is above 3232.
Intermediate: Long if the index is above 3232.
Long-term: Long if the index is above 2978 .

Telecom NZ [TEL]
Last covered August 5, 2003.
TEL has formed a broad base, with Twiggs Money Flow (100) signaling strong accumulation over the past year. In the last 4 months price has consolidated just below resistance at the upper edge of the base, a bullish sign.



Relative Strength (price ratio: xao) has fallen, forming a new 3-month low.
Support has formed at 4.30, the high from April.



MACD shows a bearish divergence and a bearish peak below zero.



On the daily volume chart we can see false breaks above resistance at [1] and [2] before a breakout on strong volume which ended with a doji at [3]. This was followed by a two-thrust correction down to [4]. Weak closes at [4] and [5] signaled buying support and were followed by two further tests of resistance at 4.60. The latest test at [6] showed up on my stock screen: price gapped up at the opening, tested resistance and then retreated all the way back to 4.40. The combination of a key reversal, a wide-ranging day and high volume make a strong bear signal. We can expect a thorough test of support at 4.35 to 4.30.



A rise above 4.60 would be bullish, whereas a fall below 4.30 will be a strong bear signal.


Aquarius Platinum [AQP]
After a marginal new high in mid-2002, AQP corrected back, in two steps, to 5.00. Price immediately rallied, forming an unstable V-bottom. Twiggs Money Flow (100) has risen above zero, to signal accumulation.



Relative Strength (price ratio: xao) has formed a new 3-month high.
Note the narrow double bottom at the end of April, a strong intermediate bull signal. This was followed by consolidation around the 7.00 resistance level in the form of a symmetrical triangle.



The daily volume chart shows the breakout above resistance on strong volume at [1]. This was followed by a bonus at [2]: a very short correction with a dry up of volume and volatility. 
A rather strange signal at [3]: price gapped up at the opening then retreated before again rallying to make a higher close. Volume gives a clue: there are no buyers. The correction takes too long, warning that the trend is changing, while the attempted rally at [4] fades on low volume. Sellers dominate and we may see a second leg down to test support at 7.60.



A rise above the high of [3] would be bullish, while a fall below 7.60 will be a bear signal. 
Longer-term support is at 7.00 and resistance at 9.00.


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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.
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on Trading and the Economy, as well as new software updates.



Understanding the Trading Diary has been expanded to offer further assistance to readers, including directions on how to search the archives.

Colin Twiggs


It is more important to say "no" to an opportunity, than to say "yes".

~ Warren Buffet.




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