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Trading Diary
November 7, 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 is bearish, closing down 0.5% at 9810 on low volume, after testing resistance at 9900. 
The intermediate trend is down.
The primary trend is up. A fall below 9000 will signal reversal.



The Nasdaq Composite formed a closing price reversal, closing 5 points down at 1971 on fair volume.
The intermediate trend is up. Expect resistance at 2000 to 2060.
The primary trend is up. A fall below 1640 will signal reversal.


 


The S&P 500 also appears bearish, closing 5 points lower at 1053 on average volume. 
The intermediate trend is up. Expect resistance at 1100.
The primary trend is up. A fall below 960 will signal reversal.
Twiggs Money Flow (100) continues to signal accumulation.



The Chartcraft NYSE Bullish % Indicator rallied to 81.68% (November 7).

Market Strategy
Short-term: Bullish if the S&P500 is above 1062. Bearish below 1045.
Intermediate: Bullish above 1062.
Long-term: Bullish above 960.


Unemployment lower
Unemployment eased to 6.0 % in October, from 6.1% a month ago. (more)

Treasury yields
The yield on 10-year treasury notes increased to 4.45%.
The intermediate trend has turned up.
The primary trend is up.



The yield curve is healthy, with a yield differential of 3.5% (10-year T-notes compared to 13-week T-bills). 




Gold
New York (13.30): After testing support at $370, spot gold recovered to $382.50 by the end of the week.
The intermediate trend is up.
The primary trend is up. Expect resistance at 400 to 415.




ASX Australia
The All Ordinaries formed an inside day on lower volume, signaling indecision. The index closed 8 points higher at 3266.



The intermediate trend has turned down but still needs to overcome resistance at 3238 to 3250.
The primary trend is up. The rally is extended and probability of a reversal increases with each successive primary trend movement. A fall below 3160 will signal reversal.  

MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is below; Twiggs Money Flow (100) is below its signal line and displays a bearish "triple" divergence.



Market Strategy
Short-term: Bullish if the All Ords is above 3280. Bearish below 3238.
Intermediate: Bullish above 3280.
Long-term: Bullish above 3160.

Sector Analysis
Materials, Consumer Discretionary and Information Technology are the most promising, with rising Relative Strength (xjo).
  • Energy [XEJ] - stage 2 (RS is rising)
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 2 (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 level)
  • Property Trusts [XPJ] - stage 3 (RS is falling)
  • Financial excl. Property [XXJ] - stage 3 (RS is falling) 
  • Information Technology [XIJ] - stage 2 (RS is rising)
  • Telecom Services [XTJ] - stage 2 (RS is level)
  • Utilities [XUJ] - stage 3 (RS is falling)



Financials-x-Property [XXJ] looks bearish. The index has closed below its August low and Relative Strength (xjo) fell to a new 1 year low.


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) fell to 52 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Diversified Metals & Mining (4)
  • Broadcasting & Cable TV (4)
  • Publishing (4)
  • Diversified Financial (3)
  • Construction & Engineering (3)
  • Movies & Entertainment (3)
  • Data Processing (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Amalgamated Holdings - AHD
  • Village Roadshow - VRL
  • News Corporation - NCP
  • ERG Limited - ERG
  • Vision Systems - VSL
  • National Australia Bank - NAB
  • Commonwealth - CBA
  • St George - SGB
  • Tab Limited - TAB
  • Tabcorp - TAH
  • UniTab - UTB


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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


The principles of successful stock speculation are based on the supposition
that people will continue in the future to make the mistakes
 that they have made in the past.

~ Thomas F Woodlock.




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