Trading Diary
August 7, 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 made more strong gains, rallying 2.2% to close at 8456.
The primary cycle trend is downwards but a rally above 8806 will signal a reversal.

The Chartcraft NYSE Bullish % Indicator has given a bull alert signal, with a reading of 30% (August 6).

The Nasdaq Composite rallied 1.7% to close at 1280. The primary cycle is in a down-trend. A break above 1355 will signal a reversal.

The S&P 500 rallied 17 points to close at 876.
The primary cycle trends downwards. A break above 912 will signal a reversal.

 
Gold rallies
December gold futures rallied 3% to $US 316.10 an ounce, benefiting from lower interest rate expectations and increased prospects of higher inflation and a weaker dollar. (more)
 
 
ASX Australia
The All Ordinaries rallied 61 points to close at 2999 on average volume. The primary cycle trends down.
The MACD (26,12,9) has crossed back above its signal line. Twiggs money flow shows a small bullish divergence.
 

 
 
Aussie dollar strengthens
The Australian dollar rises to 53.65 US cents. (more)
 
BHP [BHP]
BHP Billiton report a 10% increase in net profit but warn of volatile trading conditions ahead. (more)
BHP is in a stage 4 decline. Relative strength (price ratio: xao) and MACD are falling but Twiggs Money Flow shows a bullish divergence.
 

 

 
 
 
Billabong [BBG]
Analysts expect annual net profit between $54 and $61 million. (more)
BBG has entered a stage 4 decline. Relative strength (price ratio: xao) and MACD are declining, while Twiggs Money Flow is rising on the latest rally.
 
 

 
 
 
 
OneSteel [OST]
OST is in a stage 2 up-trend and has just completed a flag continuation pattern. Relative strength (price ratio: xao) and MACD are positive, while Twiggs money flow signals accumulation.
 
 

 

 
 
 
 




Conclusion
 
Short-term: Avoid new entries. Slow Stochastic and MACD are on opposite sides of 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
 
Thought for the Day:

Don't shoot until you can see the whites of their eyes.
- Old military expression.
 
 




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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.