Trading Diary
May 15, 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 formed an inside day, showing uncertainty, closing down at 10243 on strong volume.
The primary trend is down, secondary - up and short trend - up.

The Nasdaq Composite held on to its gains, closing at 1725.
The primary cycle is forming a base (or stage 1), secondary trend - down, while the short trend is up.
 
The S&P 500 closed 6 points down at 1091.
Primary cycle - the base still shows weakness, secondary trend - down and short cycle - up.
 
AOL Time Warner
Merrill Lynch analyst Reif Cohen goes against the herd, upgrading AOL to a "buy" rating. (more)
 
K-Mart
The bankrupt retailer recorded a $US 2.4 billion loss for the fiscal year. (more)
 
ASX Australia
The All Ords rocketed 1.9% to close at 3325 on strong volume.
Chaikin Money Flow continues to show a bullish divergence, while MACD (26,12,9) and Slow Stochastic (20,3,3) have crossed to above their signal lines.


NewsCorp [NCP]
 News Corporation Limited stock surged 15% as the market ignored the large investment write-downs and focused on stronger than expected underlying performance. (more)
 NCP is in a stage 4 decline, having under-performed the market since October 2000. Price has gapped up, accompanied by strong volume, but the secondary cycle is still in a down-trend.  


Open Telecommunications
The managing director and chief financial officer both resign. Trade in Open shares was halted last month pending the outcome of a legal dispute with Comindico. (more)
 




Conclusion
 
Short-term: My concern is that the rally may not be able to sustain itself. Long using trailing buy-stops. Maintain tight stop-losses.
Medium-term: The All Ords has not yet formed a base.
Long-term: Wait for the Nasdaq or S&P 500 to break out from their bases (trading ranges).

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.