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USA

The Dow Industrial Average shows a weak close on Friday on higher volume, signaling a possible re-test of support at 10000. A successful test of support would be a bullish sign. However, low recent volume indicates a lack of commitment from buyers. 




In the longer term, the 2004 consolidation may result in either an upward or downward breakout. Confirmation would come from a pull-back that respects support at 10500, or resistance at 10000, respectively.

Twiggs Money Flow is strengthening.




The Nasdaq Composite primary trend is headed downward. The latest rally is on low volume and appears unlikely to break resistance at 1900.
Twiggs Money Flow (not shown) is weak.





Declining volume on the S&P 500 signals a lack of commitment from buyers. With low volume on Friday's reversal, there is no indication that the rally will immediately fail, but the odds are against a successful penetration of resistance at 1150.

Twiggs Money Flow (not shown) has improved, crossing to above the signal line.





NYSE Bullish Percent

The NYSE Bullish Percent Index has recovered to 57.32% but the signal is still bearish.






Treasury yields

The yield on 10-year treasury notes rallied to 4.30% on the strength of a moderate rise in August payroll figures. Market expectations are for a quarter per cent rise at the Fed's September 21 meeting. 

The yield differential (10-year T-notes minus 13-week T-bills) recovered to 2.7%. 
Low differentials (below 1.0%) are generally bear signals.






Gold

New York: Spot gold retreated to close the week at $400.00
Marginal new highs (May to August) indicate a lack of commitment from buyers.





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ASX Australia

The All Ordinaries briefly tested 3600 before retreating Friday [c] on lighter volume. Short pull-backs at [a] and [b] signal buyers commitment. We cannot, however, rule out another test of support at 3550: Twiggs Money Flow (not shown) still appears weak, having so far failed to cross above the signal line.




The monthly chart below gives a 20-year perspective of the All Ords (with apologies to readers who prefer long-term charts in log scale - it just makes recent swings difficult to read). We have experienced a strong rally since testing support at 2800 in March 03. The rally may continue for many months but at some point we can expect a re-test of support at the previous highs of [E] and [F]; in a similar fashion to corrections [C] and [D] testing support at the highs of [A] and [B].




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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.



Incredible Charts - new Test Version

For those who are interested in upcoming additions to the software, a new test version is available for download at http://www.incrediblecharts.com/free-charting_software/latest_test_version.htm.

New Securities Toolbar

Incredible Charts version 4.0.3.670 incorporates a new securities toolbar. You are able to chart a security, without the exchange being loaded on the securities menu.



  • Enter the security symbol 

  • Click the Load Security button 

      or hit the Enter key.

 

Use the following format to enter a security:

SYMBOL_EXCHANGECODE

(e.g. bhp_ax = BHP Billiton Limited, Australia )

Where EXCHANGECODE is as follows:
  • ax = AUSTRALIA
  • ao = ASX ETO''S & WARRANTS
  • in = INDEXES
  • mx = AMEX
  • ny = NYSE
  • nq = NASDAQ

  • You can also use the drop-down list 

      to select recently loaded securities.

Default Exchange

You will not need to enter an EXCHANGECODE, in the input box, for the default exchange.
For example, if Australia is set as the Default Exchange, you need not type bhp_ax to load BHP Billiton Limited:
merely type bhp and ENTER.

To set a Default Exchange, either:
  • Select Securities >> Set Default Exchange from the chart menu; or
  • Right-click the new Load Security button 

and select an exchange.


Watchlist Correction

The new version also corrects a watchlist scrolling error that occurred with de-listed securities: the scroll no longer reverts to the first security on the watchlist.


Live Update

The test version will be released as a live update towards the end of the month.


About the Trading Diary has been expanded to offer further assistance to readers.

Colin Twiggs


Become more humble as the market goes your way.

~ Bernard Baruch



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