Trading Diary
August 13, 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 retreated 2.4% to close at 8482 on higher volume, almost completely reversing the follow-through day on the 9th.
The primary cycle trend is downwards. A rally above 8806 will signal a reversal, while a correction below 8000 will signal continuation.

The Chartcraft NYSE Bullish % Indicator has given a bull alert signal, with a reading of 32% (August 12).

The Nasdaq Composite retreated 2.9% to close at 1269, reversing the follow-through from the 9th.
The primary cycle is in a down-trend. The failure to reach the 1355 resistance level is a bearish sign.

The S&P 500 declined 19 points to close at 884.
The primary cycle trends downwards. A break above 912 will signal a reversal.

 
Fed alters bias
The Federal Reserve left the overnight bank lending rate unchanged at 1.75% but changed its bias, towards greater risk of economic weakness and lower risk of inflation. (more)
 
Applied Materials little change
Flat third-quarter results from the largest maker of semiconductor-manufacturing equipment. (more)
 
 
 
ASX Australia
The All Ordinaries continues to consolidate, closing up 6 points at 3058 on below-average volume. The primary cycle trends down.
The Stochastic (20,3,3) and MACD (26,12,9) are above their signal lines. Twiggs money flow is positive.
 

 
 
AurionGold [AOR]
AOR report a net profit of $ 63.2 million, up from $ 47.7 million last year. (more)
AOR is in a stage 3 top, with the 150-day moving average leveling out. Relative strength (price ratio: xao) and MACD are weakening, while Twiggs money flow has moved above zero, signaling accumulation.
 

 
 
Coates Hire [COA]
 COA has made a new 2-year high, after a recent period of consolidation. The day's close was weak and volume uninspiring, so wait for further confirmation. Relative strength (price ratio: xao) is rising, while Twiggs money flow has shown exceptional accumulation since mid-2001 and MACD is bullish.
 

 

 
 
 




Conclusion
 
Short-term: Long. Slow Stochastic and MACD are above their respective signal lines. Exercise caution because weakness in US markets may spill over onto the ASX.
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:

 Begin with the end in mind.

- Stephen Covey.
 
 




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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.