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Trading Diary
August 26, 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 dropped in early trading before rallying to close up 0.5% at 8919. Volume was low, showing a lack of commitment from buyers. 
The primary cycle is in a down-trend.  

The Nasdaq Composite also featured a late rally to close up 0.8% at 1391. The primary cycle is in a down-trend.

The S&P 500 gained 7 points to close at 947. The primary cycle is in a down-trend.

The Chartcraft NYSE Bullish % Indicator  bull alert signal is at 44% (August 23).


Nestle' has a taste for Hershey's
The Swiss food and beverage group has made a $US 11.5 billion bid for candy-maker Hershey Foods. (more)

Crude oil prices fuelled by concerns over Iraq 
October crude oil futures closed up at $US 29.28 per barrel. (more)



ASX Australia
The All Ordinaries fell steeply after the opening but then steadily gained through the day to close 7 points down at 3126 on lower volume.
The primary cycle trends down.
The Stochastic (20,3,3) is below its signal line. Twiggs money flow signals accumulation.




Woolworths [WOW]
The retailer unveiled a 22% increase in annual net profit and predicted 10% to 15% growth in the next year, only to be punished by the market because of lower than expected supermarket margins. (more)
WOW is entering a stage 3 top with relative strength (price ratio: xao) leveling off after a strong up-trend.



The daily chart displays a symmetrical triangle formed over the last 4 months, followed by yesterday's break down on strong volume. There was no warning from the Twiggs money flow while MACD has shown weakness over the past few months.




BRL Hardy [BRL]
 BRL rallied strongly to break above an ascending triangle formed over the last month. Yesterday's volume was low and the 150-day moving average still has a steep downward slope, so the breakout may be premature. Relative strength (price ratio: xao) has been in a decline for the past 6 months while MACD and Twiggs money flow completed bullish divergences in July. 







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:

 Common sense is not so common.

- Unknown






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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.