Trading Diary
May 17, 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 surged further ahead closing at 10353 on good volume.
The primary trend is down, secondary - up and short trend - up.

The Nasdaq Composite climbed by a similar amount to 1741.
The primary cycle is forming a base (or stage 1), secondary trend - down, while the short trend is up.
 
The S&P 500 gained a further 8 points to close at 1106.
Primary cycle - the base still shows weakness, secondary trend - down and short cycle - up.
 
Schering-Plough
Shares in the drug-maker rose after it announced that it had settled with the FDA, in connection with manufacturing violations, and agreed to pay a $US500 million fine. (more)
 
Bell-South cuts jobs
The telecom provider will cut 4000 to 5000 jobs in a bid to stay competitive. (more)
 
ASX Australia
The All Ords had another strong up day, closing at 3362 on normal volume.
MACD* (26,12,9) and Slow Stochastic (20,3,3) are both above their signal lines.


* I have reverted to using MACD 26,12,9 as there was so little difference between the signals from the default setting and from MACD 30,10,10.

NewsCorp [NCP]
 NCP has encountered European pitfalls in its drive for global pay-TV dominance. (more)
 NCP closed up 43 cents on normal volume.  


IAG [IAG]
The insurance group warns that a $2.00 offer to shareholders, by National Exchange Pty Ltd, should not be confused with the proposed share buy-back and significantly undervalues IAG shares. (more)
MACD shows a bearish divergence while Chaikin Money Flow is still strong.


 




Conclusion
 
Short-term: 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.