Trading Diary
May 6, 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 fell sharply, closing almost 2% down at 9808 on normal volume. The secondary cycle up-trend is still intact.

The Nasdaq Composite index dropped more than 2% to close at 1578. The secondary cycle is in a down-trend.
 
The S&P 500 fell through the 1070 support level, closing 1.9% down at 1052. The break below the support level has a calculated target of 960 - close to September 2001 levels.
 
Stocks tumble, interest rates unlikely to change
With the fall in stock prices, the Fed is expected to leave interest rates unchanged at its meeting tomorrow. (more)
 
The sage of Omaha
Warren Buffett speaks on the terrorism threat facing the insurance industry. (more)
 
ASX Australia
The All Ords fell below 3300 as buyers withdrew from the market, closing at 3294 on normal volume.
Slow Stochastic has joined MACD below its signal line.


 
Right when? [CML]
Coles Myer's Right Now profitability campaign misfires as the retailer issues a profit warning. (more)
MACD shows a bearish divergence since February 2002.


 
Sectors: Retail
Competitor Woolworths has continued to make gains, despite a weak bearish divergence on MACD.


 




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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