Trading Diary
May 14, 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 rallied a further 1.8% to 10298 on strong volume.

The Nasdaq Composite rallied 4% to 1719, still in a secondary cycle down-trend.
 
The S&P 500 rose more than 2% to 1097, still in a secondary cycle down-trend.
 
Retail Sales up 1.2%
April retail sales were up 1.2% on last year, largely due to Easter starting in March this year - something the market seemed to ignore. (more)
 
Wal-Mart
First-quarter earnings for the world's largest retailer jumped 15% compared to last year, while same-store sales rose 8.1%. (more)
 
Applied materials
Chip equipment maker Applied Materials earned 3 cents per share in the second quarter compared to 21 cents last year, while sales were down 46%. Performance is up on the last quarter. (more)
 
ASX Australia
The All Ords appears unconvinced by the US rally, forming an inside day with a close at 3263 on normal volume.
Chaikin Money Flow continues to show a bullish divergence while most other indicators are bearish.


NewsCorp [NCP]
 News Corporation Limited writes down its investment in US-based Gemstar TV guide by $7.7 billion. (more)
 NCP is in a stage 4 decline, having under-performed the market since October 2000.  


More of the same
There were no major surprises in the federal budget delivered by treasurer Peter Costello, although healthcare may be affected by cuts to the Pharmaceuticals Benefits Scheme. (more)
 
BHP Steel [BSL]
Investors in the spin-off are to be compensated for volatility of steel prices by a high dividend yield and a possible early capital return. (more) 
BHP: MACD and Chaikin Money Flow have both been bearish for the last 4 months.


 




Conclusion
 
Short-term: Avoid long.
Medium-term: Wait for the All Ords to form a base.
Long-term: Wait for the Nasdaq or S&P 500 to form a base.

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.