Stock Screens: Directional Movement

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Trading Diary
September 9, 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 rose 1% to close at 8519 on lower volume. The recent sequence of troughs and peaks on the secondary cycle has been 7500 - 8800 - 8000 - 9100 - 8200. The second rally was not as strong as the first, while the corrections are lengthening. In conventional terms, the last rally experienced an 80% retracement, signaling trend weakness. 
The primary cycle trends down.

The Nasdaq Composite Index formed an outside day to close 0.7% higher at 1304. The primary trend is down.

The S&P 500 gained 9 points to close at 902. The primary cycle is in a down-trend.

The Chartcraft NYSE Bullish % Indicator  bull alert signal is at 46% (September 6).



AOL Time Warner
AOL is expected to post annual revenue of $US 1.7 billion compared to $US 2.7 billion last year, because of a slump in advertising sales and slowing subscriber growth. (more)



ASX Australia
The All Ordinaries rallied 27 points to close at 3069. The weak volume signals a lack of commitment from buyers. 
The primary trend is down.
The MACD (26,12,9) and Slow Stochastic (20,3,3) are below their respective signal lines. Twiggs money flow signals distribution.





Peptech [PTD]
PTD may appeal to bottom-fishers after a 6-month bear-trend with price at roughly 50% of its previous high The biotechnology stock has held above support at 2.00, while MACD signaled a bearish divergence.





But Twiggs money flow has steadily weakened - best illustrated by the 100-day TMF - and a break below 2.00 would complete a long-term head and shoulders pattern.







Conclusion

Short-term: Avoid new entries, the All Ords shows uncertainty. The Slow Stochastic and MACD are below 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:

 The conduct of successful business merely consists in doing things in a very simple way, doing them regularly and never neglecting to do them.

 - William Hesketh Lever (founder of Lever Brothers)







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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.