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Trading Diary
September 26, 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 declined to 9313, testing support at 9300.
The intermediate trend is weak, with continued low volume.
The primary trend is up. The trendline has been broken, signaling weakness. A fall below 9000 will signal reversal.



The Nasdaq Composite closed down 26 points at 1792 on lower volume.
The intermediate trend has turned down.
The primary trend is up. Price appears headed for a re-test of the supporting trendline. A fall below 1640 will signal reversal.


 


The S&P 500 broke through support at 1000 to close at 997 on lower volume.
The intermediate trend is weak.
The primary trend is up. The trendline has been broken, signaling weakness. A fall below 960 will signal reversal.



The Chartcraft NYSE Bullish % Indicator fell sharply to 78.81% (September 26).

Market Strategy
Short-term: Bullish if the S&P500 is above 1008. Bearish below 1000.
Intermediate: Bullish above 1008.
Long-term: Bullish above 1008.


Consumer sentiment falls
The University of Michigan index of consumer sentiment fell to 87.7 for September, from 89.3 in August. (more)

Treasury yields
The yield on 10-year treasury closed down at 4.02%, testing support between 4.10% to 4.00%.
The intermediate trend has turned down. 
The primary trend is up. A close below 4.00% will signal weakness.





Gold
New York (13.30): Spot gold broke through resistance at 382, rising as high as 393 before retreating back to 380.20.
The primary trend is up.
The target for the symmetrical triangle is calculated as 426 (365 + 382 - 321), but expect heavy resistance between 400 and 415 (the 10-year high).




ASX Australia
The All Ordinaries broke below support at 3180, closing 4 points lower at 3176. Strong volume and a narrow range signal buying support above the long-term trendline.



The intermediate trend has turned down. The next support level is at 3080.
The primary trend is up. A fall below 3000 will signal reversal.  

MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is below; 
Twiggs Money Flow (100) displays a bearish peak [-] below the signal line.



Market Strategy
Short-term: Bullish if the All Ords is above 3214. Bearish below 3170.
Intermediate: Bullish above 3214.
Long-term: Bullish above 3180.

Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 2 (RS is rising).
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 1 (RS is level)
  • Consumer Discretionary [XDJ] - stage 2 (RS is rising)
  • Consumer Staples [XSJ] - stage 1 (RS is falling)
  • Health Care [XHJ] - stage 2 (RS is rising)
  • Property Trusts [XPJ] - stage 3 (RS is falling)
  • Financial excl. Property Trusts [XXJ] - stage 2 (RS is level
  • Information Technology [XIJ] - stage 2 (RS is rising)
  • Telecom Services [XTJ] - stage 2 (RS is level).
  • Utilities [XUJ] - stage 3 (RS is falling)

Financial index [ XXJ] completed a symmetrical triangle with an upward breakout on September 18. The index, however, failed to make further gains, pulling back to re-test support. Further consolidation lies ahead, with resistance at 4100 and support at 3992.


Property Trusts [XPJ] has formed a large stage 3 top pattern. Support at 1400 has, so far, held firm. A break below this level will signal the start of a stage 4 down-trend.



Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) has fallen to 54 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Gold (6)
  • Diversified Metals & Mining (4)
  • Diversified Commercial (3)
  • Diversified Financial (3)
  • Oil & Gas Exploration & Production (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Billabong - BBG
  • Globe International - GLB
  • Kingsgate - KCN
  • Sons Of Gwalia - SGW
  • Newcrest - NCM
  • Computershare - CPU
  • Higlands Pacific - HIG


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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, including directions on how to search the archives.

Colin Twiggs


I began to feel more and more that much of the success literature of the past 50 years was superficial.......

In stark contrast, almost all the literature in the first 150 years or so focused on what could be called the Character Ethic as the foundation of success - things like integrity, humility, fidelity, temperance, courage, justice, patience, industry, simplicity, modesty and the Golden Rule. Benjamin Franklin's autobiography is representative of that literature. It is, basically, the story of one man's efforts to integrate certain principles and habits deep within his nature.

The Character Ethic taught that there are basic principles of effective living, and that people can only experience true success and enduring happiness as they learn and integrate these principles into their basic character.

~ Steven Covey: The Seven Habits of Highly Effective People.




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