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Trading Diary
November 20, 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 is about to test the new 10350 support level. A strong red candle on average volume signals that sellers have gained control. A successful test of the new support level would signal a strong up-trend. Failure of this level would signal trend weakness.




The longer-term chart displays the breakout above the consolidation pattern. A failure of support at 10350 would not be a long-term signal, provided that support at 10000 holds. Failure of the major 10000 support level would be a long-term bear signal.
Overhead resistance is at 11000, with the next major level at 11400 to 11500.
Twiggs Money Flow
signals strong accumulation.




After breaking through resistance at 2050, the Nasdaq Composite is likely to pull back to test the new support level. The primary trend is now up and a successful test of 2050 will signal a strong up-trend.
Twiggs Money Flow continues to signal strong accumulation, rising well above the signal line.





The S&P 500 has also started a pull-back and is likely to test support at 1150/1160. A successful test would signal a strong up-trend and, with no major resistance levels in the vicinity, we can expect good gains. The projected target for the broadening wedge breakout is 1240: 1140 + ( 1160 - 1060).
Twiggs Money Flow continues to signal strong accumulation.









Treasury yields

The yield on 10-year treasury notes has failed to break out from the double bottom pattern at [1] and [3]. However, the short pull-back at [5] may signal that another attempt is imminent.
The yield differential (10-year T-notes minus 13-week T-bills) has fallen to 2.1%. Differentials below 1.0% are bearish.






Gold

New York: Spot gold has rallied to close at $446.40 on Friday. Support is at $430 and any correction is likely to test that level.
If successful, we can look forward to further gains, with the next major resistance level at 500.





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ASX Australia

The ASX 200 is losing momentum, having failed to make any further gains after Monday's blue candle. Strong volume and a weak close on Thursday [T] signal resistance at 3880 and we may see a test of support at 3850 (level 1) or 3820 (level 2). If the index respects level 1, from the previous peak, that would indicate trend strength; whereas a test of level 2, the previous trough, would signal that buyers and sellers are more evenly matched and some form of consolidation is taking place.




Twiggs Money Flow is rising steeply, signaling strong accumulation.
The primary up-trend is strong. The latest rally is unusually steep and at some stage (perhaps 4000) increased profit-taking will force a correction. The first major support level is at 3500 (the highs of 2002).




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The weekly Trading Diary offers fundamental analysis of the
economy and technical analysis of major market indices,
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Colin Twiggs


Those who too lightly agree will necessarily be trusted by few;
And those who regard many things as easy will necessarily end up with many difficulties.
Therefore, even the Sage regards things as difficult,
And as a result, in the end has no difficulty.

~ Lao Tse




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