Trading Diary
April 24, 2002

These extracts from my daily trading diary are intended to illustrate the techniques used in short-term trading and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use .




USA
The Dow weakened further, closing at 10030 on reasonable volume. The short-trend is down but the secondary cycle up-trend is intact.
The Nasdaq Composite index closed 1% down at 1713, signaling an intermediate down-trend. A break below the 1700 support level will signal a down-trend on the secondary cycle.
The S&P 500 followed a similar pattern, closing lower at 1093, approaching the 1070 support level.
 
AOL write-off "the biggest in history"
AOL was forced to write-down its investment in Time-Warner by $US 54.2 billion, reflecting the fall in market value of its assets. At least they paid in "funny money", one fund manager observed. (more)
 
AT&T 
The telecom giant lost nearly $US 1 billion in the first quarter. (more)
 
ASX Australia
The All Ords dropped sharply to close at 3324 on strong volume.
Chaikin Money Flow declined further, signaling continued distribution. 



Mayne under the knife [MAY]
Analysts cut their recommendations on Mayne Group Ltd after their earnings downgrade - the third in a row. (more)
There was strong distribution - Chaikin Money Flow plummeted, with Volume more than 10 times the average.


Competitor, Ramsay Health Care [RHC] moved slightly higher on the day, after confirming that it would meet earnings estimates, but the longer term picture is also weak with a bearish divergence on Chaikin Money Flow.
 


 
 




Conclusion
 
Short-term: Avoid long. Keep stop losses on existing trades as tight as possible.
Medium-term: Wait for the All Ords to bottom out - the double top has a target of 3230 to 3240.
Long-term: Wait for the Nasdaq or S&P 500 to break above their January highs.

Colin Twiggs



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Colin Twiggs

Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.

He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.