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There are now two daily updates of the Trading Diary:
  • the ASX update after 8.00 p.m. AEDT; and
  • the US market update after 11.00 a.m. AEDT.



Trading Diary
December 5, 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 retreated back below support at 9900, closing at 9862. Low volume and completion of a false (or marginal) break are bearish signs. 
The intermediate trend is uncertain. A fall below 9600 will complete a double top reversal.
The primary trend is up. A fall below support at 9000 will signal reversal.



The Nasdaq Composite fell 31 points to close at 1937. Lower volume and the break of the primary supporting trendline are bearish signs.
The intermediate trend is uncertain. A fall below 1880 will complete a double top reversal.
The primary trend is up. A fall below support at 1640 will signal reversal.


 


The S&P 500 closed 8 points lower at 1061, breaking through support on lower volume. 
The intermediate trend is uncertain. The index is likely to re-test support at 1035 (as well as the supporting trendline).
Short-term: Bullish if the S&P500 is above resistance at 1070. Bearish below 1064 (Thursday's low).




The primary trend is up. A fall below 960 will signal reversal.
Intermediate: Bullish above 1070.
Long-term: Bullish above 960.

The Chartcraft NYSE Bullish % Indicator retreated to 81.67% (December 5).


Intel wireless
Intel reports wireless chipset sales below expectations. (more)


Job creation slows
57,000 non-farm jobs were added in November, compared to 137,000 in October. (more)


Treasury yields
The yield on 10-year treasury notes gapped down to 4.21%.
The intermediate down-trend is weak..
The primary trend is up.



The yield differential is a healthy 3.3% (10-year T-notes compared to 13-week T-bills). 



US charts

US stocks are now loaded on the server.
We will release a new version of Incredible Charts, with a revised menu structure, on Sunday.





Gold
New York (13.30): Spot gold closed the week up at $406.00 after another test of the new 400 support level.
The intermediate trend is up.
The primary trend is up. Expect support at 400, resistance at 415.





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ASX Australia
The All Ordinaries closed almost unchanged at 3232. Lower volume signals consolidation, favoring continuation of the intermediate up-trend. Bearish performance of the US markets may outweigh this.



MACD (26,12,9) and Slow Stochastic (20,3,3) are above their signal lines.
Short-term: Bullish above 3212, the November 12 low. Bearish below 3173 (Monday's low).



XAO is below the long-term trendline, signaling weakness. The primary trend is up but will reverse if there is a fall below 3160 (the October 1 low). Twiggs Money Flow (100) has crossed above its signal line, indicating accumulation after the bearish triple divergence.
Intermediate term: Bullish above 3212. Bearish below 3160.
Long-term: Bearish below 3160.

Sector Analysis
The 11 sectors (10 + Property) are in various market stages. Relative Strength (xjo) measures the performance of each sector relative to the overall index.
  • Energy [XEJ] - stage 2 (RS is rising)
  • Materials [XMJ] - stage 2 (RS is falling)
  • Industrials [XNJ] - stage 2 (RS is rising)
  • Consumer Discretionary [XDJ] - stage 2 (RS is falling)
  • Consumer Staples [XSJ] - stage 1 (RS is rising)
  • Health Care [XHJ] - stage 2 (RS is level)
  • Property Trusts [XPJ] - stage 3 (RS is rising).
  • Financial excl. Property [XXJ] - stage 4** (RS is falling) 
  • Information Technology [XIJ] - stage 2 (RS is rising)
  • Telecom Services [XTJ] - stage 2 (RS is falling)
  • Utilities [XUJ] - stage 3 (RS is level)

**  Financial-x-Property Trusts [XXJ] formed a narrow line (or trading range) over the past 5 months. Within that consolidation pattern one can still see 3- to 6-week highs and lows, but I choose to ignore them because of the overriding pattern. The index broke below the 3933 support level at [7], signaling a primary trend reversal, but has subsequently retreated back within the pattern. This is a weak signal. However, Relative Strength (xjo) is falling and I will treat the primary trend as downwards until there is clear evidence to the contrary (such as a break above resistance at 4130 or a successful test of support at 3933).



Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) increased to 24 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003). Prominent sectors are:
  • Real Estate Investment Trusts (9)
  • Diversified Commercial (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Commonwealth Bank - CBA
  • National Australia Bank - NAB
  • Westpac - WBC
  • Gunns - GNS
  • St George Bank - SGB
  • Challenger - CFG
  • Brambles - BIL


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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 man who can master his time can master nearly anything.

~ Winston Churchill




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