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Trading Diary
February 9, 2004

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 hesitancy, with the index trading in a narrow range before closing slightly lower at 10579 on low volume.
The intermediate trend is uncertain. A fall below 10417 (Jan. 29 low) would signal the start of a down-trend.
The primary trend is up. A fall below support at 9600 would signal reversal.

 


The Nasdaq Composite also rejected higher prices, retreating to 2060 on lower volume. 
The intermediate trend is down.
The primary trend is up. A fall below support at 1640 will signal reversal.


 


The S&P 500 tells a similar story: trading in a narrow range before closing 3 points lower at 1139 on lower volume. Buyers lack commitment. 
The intermediate trend is uncertain. Resistance is at 1155 and 1175. A fall below 1122 (Jan 29 low) would signal the start of a down-trend.
Short-term: Bullish if the S&P500 is above the high of 1155. Bearish below 1122.

The primary trend is up. A fall below 960 would signal reversal.
Intermediate: Bullish above 1155.
Long-term: Bullish above 1000.

 


The Chartcraft NYSE Bullish % Indicator rallied to 84.89%.


Treasury yields
The yield on 10-year treasury notes continued to fall, closing at 4.065%.
The intermediate trend has reversed down.
The primary trend is up. A close below 3.93% will signal reversal.





Gold
New York (23.33): Spot gold is up at $407.51.
The intermediate trend is down. Support is at 400.
The primary trend is up.



ASX Australia
The All Ordinaries rallied to 3300. The weak close signals selling pressure. 
The intermediate trend is uncertain. A follow-through above 3300 will be a positive sign. A fall below the low of 3266 would signal the start of a down-trend.
Short-term: Bullish above 3350. Bearish below 3266.



Twiggs Money Flow (100) is below its 3-month support level, but appears to be recovering.
The primary trend is up. A fall below 3160 (the October 1 low) would signal reversal.
Intermediate term: Bullish above 3350. Bearish below 3160.
Long-term: Bearish below 3160.



Health Care: Equipment
 
Cochlear [COH] was last covered on December 11, 2003
The stock underwent a cathartic sell-off at [1], which may well establish the bottom of the stage 4 down-trend.



The sell-off must have shaken out many stock-holders who had bought at higher prices and were holding on in the hope of a recovery. The large volume tends to confirm this. New stock-holders, who bought at lower prices, are likely to have a more positive outlook. The stock does not yet present a trading opportunity: it may consolidate in a stage 1 base for many months before staging a rally.



Ventracor [VCR] - last covered on November 17, 2003.
VCR experienced the opposite to COH: a blow-off spike at [a]. Rather than consolidate at the peak (as COH did at the low), blow-offs tend to reverse sharply back to previous support levels. The down-trend in this case has slowed after breaking below the long-term trendline; opposite to what I had expected. A creeping down-trend such as this can either rally or fall sharply; so it would not be a good idea to get in too early.



Resmed [RMD] - last covered on October 28, 2003.
RMD has been in a broad base since 2002. The first breakout failed, after a bearish divergence on Twiggs Money Flow. The indicator (TMF) has since turned up sharply to signal strong accumulation. Price also responded with a rise above the 6.00 resistance level.



Relative Strength (price ratio: xao) has rallied above the previous peak. A pull-back that respects the new support level (on price and RS charts) would be a healthy bull signal.



The recent (December - January) double bottom pattern has reached its target of 6.20: 5.70 + (5.70 - 5.20). 
Price formed a breakaway gap above the 6.00 level. Volume is drying up on the pull-back. A rise above 6.20, without filling the recent gap, would be a further bullish sign.



A fall below 5.20 would be a bear signal.


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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.



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

Colin Twiggs


Perfection is achieved, not when there is nothing more to add,
but when there is nothing left to take away.

~ Antoine de Saint-Exupery.




 
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