Trading Diary
June 28, 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 closed the week almost unchanged at 9263. Sellers were in control at the close, on a day with strong volume.
This is a bear market, with primary and secondary cycles trending down.

The Nasdaq Composite closed 4 points up at 1463, with sellers dominating the close.
The primary and secondary cycles are in a down-trend.

The S&P 500 also failed to hold on to intra-day gains, closing down 1 point at 989.
Primary and secondary cycles trend downwards.

 
Consumer confidence falls
June consumer sentiment fell to 92.4 from 96.9 in May. (more)
 
Xerox copycat
The photocopier company closed 13% down after admitting to overstating earnings by $US 1.4 billion between 1997 and 2001. (more)
 
Disney re-files results
Going against the trend, Disney re-filed its Q1 and Q2 results - earnings were understated because of an accounting error related to goodwill charges. (more)
 
ASX Australia
The All Ordinaries rallied in the morning session but sellers took control before the close, driving the index down to 3163, 2 points up on yesterday, on a day with exceptionally high volume.
Primary and secondary cycles are in a bear trend.
Slow Stochastic (20,3,3) is above its signal line. 
Chaikin Money Flow signals distribution.


 
NewsCorp [NCP]
News Corporation acquires a Chicago TV station for $US 758 million. (more)
Relative Strength (price ratio: xao), Chaikin Money Flow and the MACD are all weak.


 

BHP Billiton [BHP]
Shareholders overwhelmingly back plans to spin-off BHP Steel. (more)
Relative Strength (price ratio: xao) is weakening, while Chaikin Money Flow and MACD are negative.


 

Sectors: Gold
Detrended Price oscillator has crossed below its signal line. The index has been ranging between 15.00 and 15.50 during June but closed Friday at 14.98.


AurionGold [AOR] has declined after directors rejected the Placer Dome offer. The candlestick hammer signals a support level.


Sector Analysis
 The old ASX sectors are grouped under their new GICS headings (this not 100% accurate - some stocks have been re-classified). Stage changes are highlighted in red.

Energy [XEJ] - stage 1

Energy (XEY) - stage 3

Materials [XMJ] - stage 4

All Mining (XAM) - stage 2
Gold (XGO) - stage 2
Other Metals (XOM) - stage 3
Diversified Resources (XDR) - stage 4

Other Materials
Paper & Packaging (XPP), Chemicals (XCE) - stage 2
Building Materials (XBM) - stage 3


Industrials [XNJ] - stage 4

Engineering (XEG) and Transport (XTP) - stage 3
Diversified Industrials (XDI) - stage 4

Consumer Discretionary [XDJ] - stage 4

Tourism & Leisure (XTU) -stage 2
Media (XME) - stage 4

Consumer Staples [XSJ] - stage 3

Food & Household Goods (XFH) - stage 2
Retail (XRE) - stage 3
Alcohol & Tobacco (XAT) - stage 4

Health Care [XHJ] - stage 4

Health & Biotech (XBH) - stage 4

Property Trusts [XPJ] - stage 2

Property Trusts (XPT) - stage 2

Financial excl. Property Trusts [XXJ] - stage 2

Banks & Finance (XBF) - stage 2
Investment & Financial Services (XIF), Developers & Contractors (XDC), Insurance (XIN) - stage 4

Information Technology [XIJ] - stage 4

Miscellaneous Industrials (Technology) (XMI) - stage 1

Telecom Services [XTJ] - stage 4

Telecom (XTE) - stage 4

Utilities [XUJ] - stage 1

Infrastructure Utilities (XIU) - stage 4


On July 5th the ASX will cease to provide the old ASX indices.

Sectors: Relative Strength
 A stock screen of equities using % Price Move (1 month: +10%, 1 year: +30%) is dominated by Gold and Mining Explorers.

 





Conclusion
 
Short-term: Avoid long and short - the Slow Stochastic is above its signal line.
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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