Trading Diary
June 7, 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 to 9472 before rallying back to 9589 on very strong volume. Another successful test of the 9500 support level.
A break below 9500 will signal a primary bear-trend. The secondary cycle trends downwards.
Chartcraft's NYSE Bullish % Indicator has given a bull correction signal, warning investors to adopt defensive strategies. 

After a weak opening the Nasdaq Composite rallied during the day but still closed 1.25% down at 1535.
The primary and secondary cycles continue downwards.

The S&P 500 closed 2 points down at 1027.
Primary and secondary cycles trend downwards.

 
Unexpected fall in unemployment
Unemployment levels fell to 5.8% from a high of 6%. (more)
 
Intel down 19%
Intel and AMD lead a general tech stock decline after Intel's revenue downgrade. (more)
 
ASX Australia
The All Ords recovered from a sharp morning fall to close 3 points down at 3296 on average volume.
The primary trend is up, secondary trend - down. A break above 3370 would complete an inverted head and shoulders pattern.
MACD (26,12,9) and Slow Stochastic (20,3,3) are below their signal lines.


 
ResMed [RMD]
The announcement of a share buy-back was favorably received by the market. (more)
RMD closed up at $4.76 with bullish divergences on MACD and Chaikin MF, while Relative Strength (price ratio: xao) is still weak.


 
AOG [AOG]
The directors of Australian Oil & Gas Corp. intend to recommend that shareholders accept the $2.50 per share takeover offer by Texas-based Parker Drilling. (more)
AOG closed at $2.65.


 

Village Roadshow [VRL]
The cinema group announces plans to scrap dividends "for an extended period of time". (more)
 VRL fell to $1.45 after a bearish divergence on Chaikin MF and weak Relative Strength (price ratio: xao).


 




Conclusion
 
Short-term: Avoid long. Maintain tight stop-losses.
Medium-term: Wait for the All Ords to signal a reversal.
Long-term: Wait for a bull-trend on the Nasdaq or S&P 500 (primary cycle).
 

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.