Trading Diary
August 20, 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
9000 is shaping as another resistance level, with the Dow retreating 1.3% to close at 8872 on average volume.
Primary cycle is in a down-trend.

The Chartcraft NYSE Bullish % Indicator  bull alert signal has risen to 40% (August 19).

The Nasdaq Composite formed an inside day, closing down by a similar % at 1376.
The primary cycle is in a down-trend.

The S&P 500 corrected 13 points to close at 937. The primary cycle is in a down-trend.

 
Qwest sells phone books
The troubled telecom has sold its yellow pages directory publishing unit for $US 7 billion. (more)
 
Phone stocks down
Telecom stocks traded lower after a string of analyst downgrades. (more)
 
 
 
 
ASX Australia
The All Ordinaries rose steeply in the morning and then held those levels until the close, closing up 27 points at 3126 on 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 has respected the zero line.
 

 
 
Southcorp - a good vintage [SRP]
SRP posted a stronger-than-expected 13.4% increase in earnings per share (before amortization and profit on sale of business units). (more)
SRP has been in a stage 4 decline for the past year. Relative strength (price ratio: xao) is weak but MACD and Twiggs money flow show bullish divergences, with TMF rising strongly above zero.
 

 

 
 
OneSteel [OST]
 The BHP Billiton [BHP] spin-off posted a 70% increase in earnings per share.(more)
OST reached a record high of $1.70 with relative strength (price ratio: xao) rising.
 

 
MACD and Twiggs money flow have completed bullish signals [$], with troughs respecting the zero line.
 

 
 
Insurance Australia Group [IAG]
After breaking down from a large ascending triangle IAG has rallied to test resistance at 3.15. (more)
Relative strength (price ratio: xao) is neutral, while MACD shows a bullish divergence and Twiggs money flow signals accumulation.
 

 
 




Conclusion
 
Short-term: Wait for the market to digest the poor US performance before taking any long. Slow Stochastic and MACD are above 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:

 Even if you're on the right track, you'll get run over if you just sit there.

- Will Rogers.
 
 




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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.