Trading Diary
June 26, 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 arrested its decline, closing almost unchanged above the 9000 support level at 9120 on very strong volume.
This is a bear market, with primary and secondary cycles trending down.

After a weak opening the Nasdaq Composite rallied to close up 0.4%, above the key 1400 support level, at 1429.
The primary and secondary cycles trend downwards.

The S&P 500 also had a weak opening and then rallied to above the key 960 support level, closing 3 points down at 973.
Primary and secondary cycles continue downwards.

 
Indices recover from WorldCom disclosure.
Markets staggered on disclosure of the WorldCom accounting fraud but rally by the close. (more)
 
World con
In the world's largest corporate fraud, WorldCom Inc executives concealed expenses, overstating earnings by more than $US 4 billion. (more)
 
The Fed leaves rates unchanged
The Federal Reserve maintains a neutral stance and leaves the overnight bank lending rate unchanged at 1.75%. (more)
 
ASX Australia
The All Ordinaries fell sharply to close 1.5% down at 3130 on above-average volume.
Primary and secondary cycles are in a bear trend.
MACD (26,12,9) and Slow Stochastic (20,3,3) are below their signal lines. 
Chaikin Money Flow signals distribution.


 

Aussie dollar falls
The dollar fell more than 2% in overnight trading. (more)
 
Telstra [TLS]
Telstra tested support at $4.45 before closing at $4.50. Relative Strength (price ratio: xao) is falling and Chaikin Money Flow signals distribution, while MACD shows a bullish divergence.



 

AurionGold rejects takeover bid [AOR]
Directors of AurionGold have rejected the Placer Dome takeover bid, citing a number of factors including Placer's falling share price. (more)
The Detrended Price Oscillator is rising, while Chaikin Money Flow holds just above zero.


 

PaperLinX [PPX]
The Amcor spin-off acquires UK paper merchant Bunzl Fine Paper for $366 million. (more)
Relative Strength (price ratio: xao) is strong, while Chaikin Money Flow and MACD appear weak.


 
 




Conclusion
 
Short-term: Short in selected sectors - MACD and slow Stochastic are below their signal lines.
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.