Trading Diary
July 31, 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 continued its consolidation after Monday's follow-through, closing up 0.65% at 8736. The primary cycle trends downwards.

The Chartcraft NYSE Bullish % Indicator has a reading of 24% (July 30). See Bullish % Index for more details.

The Nasdaq Composite closed down more than 1% at 1328 but held above the low of Monday's follow-through. Primary cycle is still in a down-trend.

The S&P 500 closed up 9 points at 911.
The primary cycle trends downwards.

 
GDP growth slows
Second-quarter GDP growth slowed to an annual rate of 1.1%, less than half the expected rate. (more)
 
IBM - PWC
Hewlett-Packard attempted to buy PW Consulting 2 years ago for $US 18 billion. IBM is to pay $US 3.5 billion. (more)
 
Survivors of the tech wreck
Microsoft, Hewlett Packard, Oracle and others have survived the last 2 year's slide with strong balance sheets. (more)
 
ASX Australia
The All Ordinaries consolidated, closing up 3 points at 3033 on average volume. It is important that the next week hold above the 2940 support level.
The primary cycle trends down.
Slow Stochastic (20,3,3) is above its signal line, MACD (26,12,9) is below. Exponentially-smoothed money is below zero.
The Coppock indicator finished the month just above zero.
 

 
 
Aurion Gold [AOR]
AOR directors recommend that shareholders reject Placer Dome's sweetened takeover offer. (more)
The stock has crossed below it's 150-day moving average, with falling relative strength, MACD and exponentially-smoothed money flow.
 

 
Never argue with the tape [COH]
Cochlear continues to surge on the news that their rival has withdrawn its hearing implant product from the market.
Relative strength (price ratio: xao) and exponentially-smoothed money flow are improving. MACD signals a bullish divergence but is still below zero.

 


 
 
 
 
Insurance Australia Group [IAG]
IAG (formerly NRMA) announces that it will incur a net loss of up to $ 40 million for the financial year. (more)
The target for the breakout from the large triangle is $2.45. Relative strength (price ratio: xao), exponentially-smoothed money flow and MACD are all weakening.

 


 
 
 
 




Conclusion
 
Short-term: Avoid new entries. The Slow Stochastic and MACD are on opposite sides of their respective signal lines. Keep stops tight.
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:

The tape never lies.
- Edwin Lefevre.
 
 




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