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Trading Diary
October 21, 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 closed weaker at 9748 on higher volume, signaling that another test of support is likely.
The intermediate trend is up. An up-turn above 9660 will signal trend strength.
The primary trend is up. A fall below 9000 will signal reversal.



The Nasdaq Composite rallied 16 points to close at 1941 on higher volume. Expect some resistance at 1967.
The intermediate trend is up.
The primary trend is up. A fall below 1640 will signal reversal.


 


The S&P 500 gained 1 point to close at 1046 on higher volume.
The intermediate trend is up.
The primary trend is up. A fall below 960 will signal reversal.



The Chartcraft NYSE Bullish % Indicator recovered slightly to 81.65% ( October 21).

Market Strategy
Short-term: Bullish if the S&P500 is above 1045.
Intermediate: Bullish above 1045.
Long-term: Bullish above 960.


Dollar down, bonds up
The dollar weakened against the euro and the yen. (more)

Treasury yields
The yield on 10-year treasury notes eased slightly to 4.37%.
The intermediate trend is up. Expect resistance at 4.60%.
The primary trend is up.




Gold
New York (21:48): Spot gold rallied strongly to $380.10.
The intermediate trend is uncertain.
The primary trend is up, with support at 343 to 350.


ASX Australia
The All Ordinaries broke out above its congestion pattern, closing up 16 points at 3311 on higher volume.



The intermediate trend is up.
The primary trend is up. A fall below 3160 will signal reversal.

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (100) has crossed back above its signal line but still displays a bearish "triple" divergence.

Market Strategy
Short-term: Bullish if the All Ords is above 3307.
Intermediate: Bullish above 3307.
Long-term: Bullish above 3160.

Sirtex [SRX]
This biotech stock has formed a broad stage 3 top. Relative Strength (price ratio: xao) has declined, with a lower high at [4]. The indicator has now given another bear signal at [5], with a break below its previous low. 

In the earlier up-trend, two high probability entry points are evident: Price made a short pull-back below resistance at [1] while RS had already given a bull signal, rising above its previous high and respecting the support level on the pull-back. At [2], price respected the new support level accompanied by a similar pattern on RS.



Twiggs Money Flow (100) is falling but still signals accumulation.
Support is at 3.80/3.90; a fall below this level will be strong confirmation of the RS bear signal. A rise above resistance at 5.30 would be bullish.



Chemeq [CMQ]
Last covered June 25, 2003.
CMQ retreated after a blow-off spike at [2], before consolidating above 5.00. The pattern is bullish, with higher lows at [3] and [4]. Relative Strength (price ratio: xao) has held above support and is now rising to test the last high.



Twiggs Money Flow (100) signals strong accumulation over the past 2 years.



A rise of price and RS above their September highs will be a bull signal; strengthened if the next pull-back respects the new level.
A close below 5.50 will 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.



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

Colin Twiggs


There is a philosophy about the secondary reaction in a bull market which should not be overlooked.....

such secondary reactions are started by developments which could by no possibility have been foreseen.
These have their obvious effect upon an over-extended bull account.
 The market therefore performs its most valuable service, that of insurance.
 It recedes to a safer level until it is entirely clear as to the nature of the unfavorable symptom
 which it cannot yet diagnose with certainty.

~ William Hamilton: The Wall Street Journal (November 3, 1922)




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