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Trading Diary
February 13, 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 closed at 10627 after testing support at 10600. 
A fall below the recent low of 10417 would signal a re-test of support at 10000.
The primary trend is up. Resistance is at 11300 to 11350. A fall below support at 9600 would indicate the start of a down-trend.



The Nasdaq Composite closed down 20 points at 2053. The strong downward bar and light volume signal a lack of buying support. 
The intermediate trend is down. Support is at 2000.
The primary trend is up. A fall below support at 1640 would signal reversal.


 


The S&P 500 has retreated to 1145 after a false break above the previous high. Expect a re-test of support at the previous low of 1122.
The intermediate trend is uncertain.
The primary trend is up. Expect strong support at 1000. A fall below 960 would signal reversal.
Intermediate: Bullish above 1155. Long-term: Bullish above 1000.



The Chartcraft NYSE Bullish % Indicator rallied to 85.47%.
More than 80% of NYSE stocks are in an up-trend, the highest level in 10 years.


Fed gives positive outlook
Chairman Alan Greenspan says that the economy has turned the corner but the central bank will be patient in deciding when to raise interest rates. (more)


Treasury yields
The yield on 10-year treasury notes is consolidating around 4.05% over the last 2 days.
The intermediate trend is down.
The primary trend is up. A close below the September low of 3.93% would signal reversal.



The yield differential (10-year T-notes compared to 13-week T-bills) is a healthy 3.1%.
See Interest Rates for a discussion of the yield differential.




Gold
New York: Spot gold ended the week slightly lower at $409.90.
The intermediate trend is uncertain. Support is at 400.
The primary trend is up. A fall below $370 would signal reversal.





 
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ASX Australia
The All Ordinaries closed at 3347, after testing resistance at 3350. Expect short-term consolidation and, possibly, retracement, before another test of resistance.
Short-term: Bullish above 3350. Bearish below 3266.



Twiggs Money Flow (100) has rallied back above its 3-month support level.
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.

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 level)
  • Industrials [XNJ] - stage 2 (RS is rising)
  • Consumer Discretionary [XDJ] - stage 3 (RS is level)
  • Consumer Staples [XSJ] - stage 3 (RS is falling)
  • Health Care [XHJ] - stage 1 (RS is level)
  • Property Trusts [XPJ] - stage 3 (RS is level).
  • Financial excl. Property [XXJ] - stage 3* (RS is rising
  • Information Technology [XIJ] - stage 3 (RS is falling)
  • Telecom Services [XTJ] - stage 3 (RS is falling)
  • Utilities [XUJ] - stage 2 (RS is level)


*Financials-X-Property [XXJ] has made a stronger breakout from the lengthy consolidation pattern. It may be prudent to wait for a pull-back to confirm the change to a stage 2 up-trend (if it respects the new support level).




Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) increased to 36 stocks, from 21 last week.
The highest reading was 131 on April 11, 2003 and the lowest was 8 on March 14, 2003. 
Prominent sectors:
  • Diversified Metals & Mining (4)
  • Construction Materials (3)
(the figure in brackets shows the number of stocks from an industry that were returned in the screen).


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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.



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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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