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Trading Diary
November 13, 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 showed indecision with an inside day on low volume, closing at 9838. 
The intermediate trend is down.
The primary trend is up. A fall below 9000 would signal reversal.



The Nasdaq Composite formed an inside day on slightly higher volume, signaling some resistance. The index closed 6 points lower at 1967.
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 shows indecision, closing 1 point lower at 1058 on slightly higher volume. 
The intermediate trend is up. Expect some resistance at 1100 (a significant support level from 2001/02).
Short-term: Bullish if the S&P500 is above 1060 (Today's High).



The primary trend on the S&P 500 is up. A fall below 960 will signal reversal (the low from the secondary correction in August).
Intermediate: Bullish above 1062 (Friday's High). Long-term: Bullish above 960.

The Chartcraft NYSE Bullish % Indicator edged up slightly to 81.06% (November 13). 
A 3-box reversal is required to signal a bear alert.


Wal-Mart: consumers cautious
Consumers are still cautious according to Wal-Mart CEO Lee Scott.
(more)

Treasury yields
The yield on 10-year treasury notes closed down sharply at 4.27%.
The intermediate trend is up. Equal highs, [2] and [3], below the previous high [1] are a bear signal.
The primary trend is up.





Gold
New York (20:39): Spot gold increased to $395.20.
The intermediate trend is up.
The primary trend is up. Expect resistance at 400 to 415.




ASX Australia
The All Ordinaries has pulled back to test resistance at 3238/3250, closing 13 points higher at 3230. Lower volume signals a lack of enthusiasm from buyers.
MACD (26,12,9) and Slow Stochastic (20,3,3) are both below their signal lines.



The intermediate trend is down but a swing back above the 3238 to 3250 band of resistance would be bullish.
Short term: Bearish below 3238; Bullish above 3250.

The primary trend is up but the rally is extended. Probability of a reversal increases with each successive primary trend movement.
The index has broken the primary trendline and a fall below support at 3160 will signal reversal.
Twiggs Money Flow (100) has crossed below zero after a bearish triple divergence.
Intermediate: Bearish below 3160; Bullish above 3250. Long-term: Bearish below 3160.

Resolute Mining [RSG]
A friend has held Resolute for the past few months. The stock resumed a fast up-trend after a triangular consolidation.
Twiggs Money Flow (100) climbed sharply after crossing its signal line at [1], leveled out during the consolidation, before again starting to climb.



Relative Strength (xao) has resumed its upward rise after a higher low at [e2].
The earlier rise was signaled by higher lows at [e].



Note the dry-up of volume on the downward swings during the consolidation; a bullish sign.
Consolidations often form roughly at the mid-point in an upward trend; so the target is measured from the start of the trend at, say 0.80, to the high of the triangle, at 1.35. This is then projected from the breakout at 1.25: 1.25 + (1.35 - 0.80) = 1.80. 
A more conservative estimate can be calculated from the high and low of the triangle: 1.25 + (1.35 - 1.02) = 1.58. 

Entry points were presented at [1] and [3]. Stops at [3] should be placed below the low of [2]: the opposite edge of the triangle is too far away.
Stops should be moved up below each short-term correction or lagged further, below a moving average.



Lihir [LHG]
Last covered September 9, 2003.
Lihir has been in a sideways consolidation before threatening a downward breakout - note the fall on RS. Price appears to be recovering but watch for further weakness.




Croesus [CRS]
Last covered September 9, 2003.
Twiggs Money Flow sometimes dips during a consolidation but in this case TMF (100) has fallen sharply, crossing below zero.



Again, Relative Strength (xao) shows signs of weakness and should be watched closely.




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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


Each of us tends to think we see things as they are, that we are objective.
But this is not the case.
We see the world, not as it is, but as we are - or as we are conditioned to see it. 
When we open our mouths to describe what we see, we in effect describe ourselves,
our perceptions, our paradigms.
When other people disagree with us, we immediately think something is wrong with them.

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




Ramping

Readers have been quick to identify attempts at ramping on the forum. 
Some rampers must be desperate to offload their stock
- they keep popping up under new aliases when they are suspended.
We have had to block the use of Hotmail accounts on the Chart Forum for that reason.

Please remain vigilant and beware of any "raging bull posts" that lack real substance.
I have kept one thread as an example: MPO - about to fly




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