Trading Diary
July 5, 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 rocketed up 3.5% to close at 9379 on very low volumes. If the rally continues, a break above 9435 will complete a double bottom pattern with a target of 10035.
This is a bear market, with primary and secondary cycles trending down.

The Nasdaq Composite rallied almost 5% to 1448.
The primary and secondary cycles are in a down-trend.

The S&P 500 gained 35 points to 989.
Primary and secondary cycles trend downwards.

 
Tech rally
Technology stocks rallied strongly, with Intel (up 10%) and other chip stocks leading the charge. (more)
  
ASX Australia
The All Ordinaries see-sawed before closing up 7 points at 3164 on low volume. 
A break above 31.80 would complete a short double-bottom pattern with a target of 32.30.
Primary and secondary cycles are in a bear trend.
Slow Stochastic (20,3,3) has crossed above its signal line. 
Exponentially-smoothed Money Flow shows a slight bullish divergence.


 

AurionGold rejects bid [AOR]
AurionGold rejected the Placer Dome bid because of a 25% fall in the stock price of the Canadian company. (more)
 AOR has made a correction (secondary cycle) back towards the long-term moving average
MACD and Relative Strength (price ratio: xao) are weakening but exponentially-smoothed Money Flow continues to signal accumulation.


 
PMP [PMP]
PMP has encountered resistance at 93 cents for several months. Exponentially-smoothed Money Flow and Relative Strength (price ratio: xao) are strong but MACD shows a bullish divergence.



 

Sigma [SIG]
SIG appears to be forming a triangle top after a strong up-trend. The likely direction of the breakout is uncertain but the exponentially-smoothed Money Flow signals strong accumulation. Relative Strength (price ratio: xao) and MACD are improving.


Sector Analysis
 Stage changes are highlighted in red.

Energy [XEJ] - stage 1

Materials [XMJ] - stage 4 (RS is rising)

Industrials [XNJ] - stage 4

Consumer Discretionary [XDJ] - stage 4

Consumer Staples [XSJ] - stage 3

Health Care [XHJ] - stage 4

Property Trusts [XPJ] - stage 2

Financial excl. Property Trusts [XXJ] - stage 3

Information Technology [XIJ] - stage 4

Telecom Services [XTJ] - stage 4 (RS is rising)

Utilities [XUJ] - stage 1


The ASX has ceased 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 Explorers (Producers are notably absent). Oil & Gas Explorers, Mineral Sands and Diversified Media stocks are also evident.

 





Conclusion
 
Short-term: No long or short - the Slow Stochastic is above, and MACD below, their respective 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.