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Trading Diary
December 15, 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
After an early rally the Dow Industrial Average retreated sharply to close lower at 10022. Higher volume and the weak close signal increased selling pressure but the index is still above support at 10000.
The intermediate trend is up.
The primary trend is up. A fall below support at 9000 will signal reversal.

 


The Nasdaq Composite gapped up at the opening but then fell more than 3% to close at 1918 on higher volume.
The intermediate trend is uncertain. A fall below 1880 will complete a double top reversal pattern with a target of 1760: 1880-(2000-1880).
The primary trend is up. A fall below support at 1880 will signal reversal.


 


The S&P 500 closed 6 points lower at 1068 on higher volume.
The intermediate trend is up.
Short-term: Bullish if the S&P500 is above today's high of 1082. Bearish below 1053, Wednesday's low.

The primary trend is up. A fall below 960 will signal reversal.
Intermediate: Bullish above 1082.
Long-term: Bullish above 960.

 


The Chartcraft NYSE Bullish % Indicator increased to 82.46% (December 15). The Bull signal continues.


Dollar falls
The dollar reached a record low of $1.2311 against the euro. (more)

Treasury yields
The yield on 10-year treasury notes is up at 4.27%.
The intermediate trend is down.
The primary trend is up.




Gold
New York (23.05): Spot gold rallied to $409.50 after earlier testing support at 400.
The intermediate trend is up.
The primary trend is up. Expect resistance at 415.




ASX Australia
The All Ordinaries rallied 36 points to close at 3252 on higher volume, signaling increased buying pressure.
The intermediate up-trend continues.



MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) has crossed above.
Short-term: Bullish above 3213, Thursday's high. Bearish below 3173 (the December 1 low).

The All Ords is below its long-term trendline, signaling weakness. The primary trend is up but will reverse if there is a fall below 3160 (the October 1 low), which would also complete a head and shoulders reversal.
Twiggs Money Flow (100) is leveling out, with equal lows, after a bearish triple divergence.
Intermediate term: Bullish above 3213. Bearish below 3160.
Long-term: Bearish below 3160.

ERG Limited [ERG]
Last covered November 4, 2003
ERG formed a broad base during 2003, followed by a strong intermediate rally. The rally lost momentum and we now see a correction back to the primary trendline. Twiggs Money Flow signals buying pressure, with a rise above zero.



Relative Strength (price ratio: xao) has pulled back to test support, imitating the price pattern.



Equivolume shows the dry-up of volume on the latest secondary correction. The false break below 1.18 is fairly bullish.



A dry-up of volume and volatility at the support level may present long opportunities.
A fall below support on price and RS charts will be bearish, confirmed if a pull-back respects the new resistance level.


Foodland [FOA]
Last covered October 1, 2003.
FOA has formed a broad stage 3 top. Twiggs Money Flow (100) continues to decline, signaling selling pressure. Support is at 16.00 to 17.00.



Relative Strength (Price Ratio: xao) shows a similar top pattern, with RS testing the long-term support level.



A fall below support on both price and RS charts would be a bear signal, confirmed if the pull-back respects the new resistance level.


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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


Wisdom, in short, whose lessons have been represented as so hard to learn
by those who were never at her school, teaches us only to extend a simple maxim
universally known and followed even in the lowest life,
a little farther than that life carries it.
And this is not to buy at too dear a price.

Now, whoever takes this maxim abroad with him into the grand market of the world,
and constantly applies it to honors, to riches, to pleasures,
and to every other commodity which that market affords,
is, I will venture to affirm, a wise man;
and must be so acknowledged in the worldly sense of the word:
for he makes the best of bargains,
since in reality he purchases everything at the price of a little trouble,
and carries home all the goods I have mentioned,
while he keeps his health, his innocence and his reputation,
the common prices which are paid for them by others,
entire and to himself.

- Henry Fielding: Tom Jones (1749).




Daily Trading Diary

Today is the last daily newsletter until Monday, January 5th.
I will continue with the weekly updates.
Enjoy the Christmas break.




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