Trading Diary
August 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 fell 2.6% to 8506, holding above Monday's follow-through. The primary cycle trends downwards.

The Chartcraft NYSE Bullish % Indicator has a reading of 24% (July 31). See Bullish % Index for more details.

The Nasdaq Composite dropped 3.6% to 1280 but has not yet closed the breakaway gap from Monday's follow-through. Primary cycle is still in a down-trend.

The S&P 500 closed 27 points down at 884, testing the follow-through day from Monday.
The primary cycle trends downwards.

 
Manufacturing growth slows
The Institute of Supply Management factory index fell to 50.5 in July, from 56.2 in June. (more)
 
Disney down
Disney records a drop in third-quarter earnings and warns on fourth-quarter performance. (more)
 
ExxonMobil
The oil and gas giant reported a 40% drop in second-quarter earnings per share. (more)
 
Stephen Roach on the US economy
Morgan Stanley's chief global economist takes stock of the US economy. (more)
 
 
ASX Australia
The All Ordinaries consolidation continues, closing down 9 points at 3024 on average volume. It is important that the next week hold above the 2940 support level.
The primary cycle trends down.
MACD (26,12,9) has joined Slow Stochastic (20,3,3) above its signal line. Exponentially-smoothed money flow signals distribution.
 

 
 
Lihir Gold [LHG]
LHG is entering a stage 4 decline, with 20-day moving average crossing below the 150-day moving average. Relative strength (price ratio: xao) is declining and MACD is weak but exponentially-smoothed money flow displays a bearish divergence.
 

 

 
Westpac off target [WPC]
Chief executive David Morgan told analysts that the bank is likely to miss its growth target for this year, citing poor equity markets and "some bad news on the corporate debt side" as the cause. (more)
WBC recently broke down from a large triangle. Relative strength (price ratio: xao) is still positive but exponentially-smoothed money flow and MACD show weakness.

 


 
 
 
 
Qantas strike action [QAN]
More than 6000 of the airline's staff strike over pay demands. (more)
QAN is in a trading range between 4.30 and 4.90. Relative strength (price ratio: xao), exponentially-smoothed money flow and MACD are all positive.

 


 
 
 
 




Conclusion
 
Short-term: Be cautious in long. Slow Stochastic and MACD are above their respective signal lines but exponentially-smoothed money flow signals distribution.
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:

It is not the strength of the body that matters, but the strength of the spirit.
- J.R.Tolkien.
 
 




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