Trading Diary
July 10, 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 fell more than 3% to close at 8813 on strong volume, below the 9000 support level.
This is a bear market, with primary and secondary cycles trending down.

The Nasdaq Composite fell a further 2.5% to close at 1346, below September 2001 levels.
The primary and secondary cycles are in a down-trend.

The S&P 500 lost 32 points to close at 920, the lowest level since January '98.
Primary and secondary cycles trend downwards.

 
Safe havens clobbered
 Safe haven stocks, especially drug companies, were sold down sharply. New entries to the reshuffled S&P 500 (EBay, Goldman Sachs, UPS and Prudential) are amongst the few gainers. (more)
 
Qwest probe
THe US Attorney's office has begun criminal investigations into accounting at Qwest Communications, the long distance telephone company. (more)
  
Gold dip
 Gold and silver decline against a more stable dollar, August gold futures close at $US 315.10. (more)
 
ASX Australia
The All Ordinaries closed 30 points down at 3175 on average volume. It now appears unlikely that the double-bottom pattern will reach its target.
The primary cycle is in a bear trend, secondary cycle has completed a reversal.
MACD (26,12,9) and Slow Stochastic (20,3,3) are above their signal lines. 
Exponentially-smoothed Money Flow has retreated to negative territory.


CSR makes US acquisition [CSR]
CSR pays $US 540 million for US-based aggregate company Kiewit Materials. (more)
CSR has been in a stage 3 top since September last year. Relative Strength (price ratio: xao) and exponentially-smoothed Money Flow are improving, while MACD confirms the up-trend (higher low, higher high) on the price chart.


Peptech [PTD]
Peplin Biotech receive a US patent for their Tumor Necrosis Factor (TNF) antibodies. (more)
 Relative Strength (price ratio: xao) and MACD are improving, while exponentially-smoothed Money Flow has swung to accumulation.


Billabong [BBG]
BBG has entered a stage 3 top in the form of a declining wedge.
Relative Strength (price ratio: xao) has failed to make further progress since February and MACD is declining, but exponentially-smoothed Money Flow signals accumulation.







Conclusion
 
Short-term: The Slow Stochastic and MACD are above their respective signal lines. Exercise extreme caution because of the weakness in US markets.
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
 
Thought for the Day:

When the going gets tough, the tough go shopping. - Unknown.

 
 




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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.