Trading Diary
July 1, 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 appears headed for another test of the
9000 support level, closing down 1.4% at 9109 on above-average
volume.
This is a
bear market, with primary and secondary
cycles trending down.
The Nasdaq Composite plummeted 4% to close
just above last September lows at 1403.
The primary and secondary cycles are in a down-trend.
The S&P 500 is again testing the September
2001 support level, closing down 21 points at 968.
Primary and secondary cycles trend downwards.
WorldCom
Trading resumed in the troubled telcom, with panic selling
pushing volumes to record levels.
(more)
3M on track
3M Co. will beat second-quarter earnings
forecasts, citing strong sales growth, especially in Asia.
(more)
Vivendi Universal
Chairman and CEO Jean-Marie Messier is to be
replaced by the board after record losses. Moody's Investor
Services cut Vivendi debt to junk grade. (more)
ASX Australia
The All Ordinaries rallied 13 points up to 3176
but on low volume.
Primary and secondary cycles are in a bear
trend.
Slow Stochastic (20,3,3) is above its signal
line.
Chaikin Money Flow is below zero, signaling
distribution.
Telstra [TLS]
Faced with flat growth at home, Telstra plans
to spend $5 billion on acquisitions in Asia.
(more)
Relative Strength (price ratio: xao) and
Chaikin Money Flow are improving
while MACD shows a bullish
divergence.
The double bottom pattern completed Friday has a target of
$4.98 but volume confirmation is a bit suspect with
above-average volume on the second trough and a low close on
the completion day.
Macquarie Bank [MBL]
MBL recorded a new 1-year low, closing at $27.98.
Relative Strength (price ratio: xao) and
Chaikin Money Flow are weak. The bullish divergence on MACD is
a distortion caused by the large gap [G] on February
6th.
Note the distortion caused by an unusually
sharp down move on Chaikin Money Flow day [1]. The indicator
ticks up sharply 22 days later, on day [2], when data from
day [1] is dropped. The second Money Flow indicator uses an
exponentially-smoothed formula for more accurate results.
Please ignore the name - I have not yet decided what to call
it.
Sectors: Gold
Newcrest Mining is one of several
gold producers entering a secondary correction.
AurionGold [AOR] has declined after
directors rejected the Placer Dome offer.
Lihir Gold [LHG] will complete a major
double top if it descends below $1.15.
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
Back Issues
Back
Issues
Access the Trading Diary Archives.
