Trading Diary
June 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 penetrated the 9500 support level,
falling to 9260 before recovering to 9474 on strong volume.
The break completes a broad
head and shoulders pattern and signals the start of a primary
bear-trend.
Chartcraft's NYSE Bullish % Indicator has given a bull
correction signal, warning investors to adopt defensive
strategies.
The Nasdaq Composite closed up 0.5% at
1504.
The primary and secondary cycles trend downwards.
The S&P 500 fell to 981 before recovering
to close 2 points down at 1007.
Primary and secondary cycles trend downwards.
Consumer confidence
June consumer confidence fell
to 90.8, from 96.9 in May. The biggest decline since last
September. (more)
Sprint PCS
The No.4 US wireless carrier
cut fourth-quarter new subscriber estimates by 60%.
(more)
Money flows into bonds
Investors switching from
equities to bonds drove the yield on 10-year treasury notes down
to 4.8%. (more)
ASX Australia
The All Ordinaries fell to 3246 on average
volume, equaling the May low. A break below this level will
signal the start of a primary bear trend.
Chaikin Money Flow has crossed below zero,
signaling distribution.
MACD (26,12,9) and Slow Stochastic (20,3,3)
are below their signal lines.
SingTel likely to be dropped from ASX 200
[SGT]
Singapore Telecommunications and Hutchison
Telecommunications are likely to be dropped from the ASX 200
when Standard & Poors switches to free float measurement.
(more)
Chaikin Money Flow has shown strong
accumulation over the last 2 months, before yesterday's drop
below zero. Relative Strength (price ratio: xao) and MACD
remain weak.
Foodland [FOA]
The High Court of New Zealand set aside
the order preventing FOA from proceeding with acquisition
of Woolworths NZ. Rival, Foodstuffs, threatens further
legal action. (more)
QBE Insurance [QBE]
Merrill Lynch cut their profit forecast
for QBE, citing a poor investment environment, renewed
terrorism fears and the rising dollar. (more)
QBE has penetrated
the $7.00 support level [B] and Chaikin Money Flow has
crossed below zero. Relative Strength (price ratio: xao)
and MACD are weak.
Sectors: Insurance
The insurance index (XIN) is signaling a
bear trend, with weakening Relative Strength (price
ratio: xao) and falling 30-week weighted moving
average.
Sectors: Gold
The correction on the gold index (XGO)
continues with a fall of 10% from the recent high. The
primary bull-trend is still strong.
Conclusion
Short-term: Avoid long and short. There is a
good chance of a rally at the 3250 support level.
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
Please forward this to your friends and
colleagues.
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