Trading Diary
July 2, 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 down more than 1% at 9007 on above-average volume, holding just above the 9000 support level..
This is a bear market, with primary and secondary cycles trending down.

The Nasdaq Composite crashed through the 1400 support level from September last year, closing 3.3% down at 1357.
The primary and secondary cycles are in a down-trend.

The S&P 500 closed down 20 points at 948, below the 960 support level from September 2001.
Primary and secondary cycles trend downwards.

 
This is not a market bottom
Stocks have further to fall says Paul F Desmond of Lowry's Reports, a bear market specialist. (more)
 




Gold
Dealers see little upside potential in the short-term, with resistance at $US 316.00 and at $318.25 per ounce. (more)
 
Chip stocks
Chip stocks are suffering from soft demand for personal computers and mobile phones. (more)
 
ASX Australia
The All Ordinaries closed down 17 points at 3159 on average 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. An exponentially-smoothed money flow is depicted below.


 

AMP [AMP]
Analysts expect disappointing half-year results. (more)
MACD may show a bullish divergence but Relative Strength (price ratio: xao) and exponentially-smoothed Money Flow are weak.


 
National Foods [NFD]
The merger of the consumer products divisions of Bonlac and Fonterra is just one step in a long-awaited industry rationalization. (more)
Relative Strength (price ratio: xao) and MACD are bullish while exponentially-smoothed Money Flow is weaker.


 

Australian Gas Light [AGL]
AGL completes the purchase of Pulse Energy for $880 million. (more)
 
Alesco [ALS]
ALS has been wedging up over the past few weeks, testing resistance at $3.90. The stock still has to break further resistance at $4.00. Relative Strength (price ratio: xao) and exponentially-smoothed Money Flow are strong, while MACD is bullish.


 

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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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.