Trading Diary
May 3, 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 is back down at the 10000 level, closing
at 10006 on normal volume. The secondary cycle up-trend is
still intact.
The Nasdaq Composite index managed a more spectacular 1.9% fall, to close at 1613. The secondary cycle is in a down-trend.
The S&P 500 again tested the 1070 support
level, closing at 1703. A break below the support level has a
calculated target of 960.
Gold is gaining strength
Gold shares are already discounting higher gold
prices and may be out-performed by gold
bullion. (more)
ASX Australia
The All Ords gained slightly, closing above the
3300 support level, at 3315 on strong volume.
Chaikin Money Flow has moved to above zero and
the Slow Stochastic above its signal line, but it is too early to
call this a market bottom.
ResMed in need of resuscitation [RMD]
RMD recorded strong growth in sales and
earnings but warn of difficulty meeting forecasts for the
fourth-quarter. (more)
The stock fell as low as $4.73 before
rallying to $5.40. The sharp increase in Chaikin Money Flow
should not be interpreted as a buy signal.
Interest rates
Strong retail sales may precipitate an
interest rate rise. (more)
Sectors: Gold
The gold index XGO continues to rise, with
relative strength (price ratio: all ords) improving.
Conclusion
Short-term: Avoid long. Keep stop losses on existing trades as
tight as possible.
Medium-term: Wait for the All Ords to form a base.
Long-term: Wait for the Nasdaq or S&P 500 to break above
their January highs.
Colin Twiggs
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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.