Stock Screens: Directional Movement

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Trading Diary
September 10, 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 gained a further 1% to close at 8602 on average volume. The primary cycle trends down.

The Nasdaq Composite Index rallied 1.2% to close at 1320. The primary trend is down.

The S&P 500 added 7 points to close at 909. The primary cycle is in a down-trend.

The Chartcraft NYSE Bullish % Indicator  bull alert signal is at 46% (September 9).



Mild rally
Chips and automotive stocks lead a mild rally despite heightened terror alerts. (more)



ASX Australia
The All Ordinaries lost 8 points to close at 3061 on below-average volume.
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.





QBE Insurance Group [QBE]
The insurance stock experienced a dramatic fall in September last year, entering a stage 4 down-trend. The 150-day moving average has now leveled out and the stock is showing signs of building a stage 1 base. MACD has risen steadily until price encountered resistance at 7.60 to 7.65.





QBE failed to break through resistance at 7.65 and has retreated after strong selling at [1] overcame buying pressure, causing a downward gap two days later. The stock appears set to test resistance at 6.25 and 6.05 before we can again look for a recovery.







Conclusion

Short-term: Avoid new entries - the All Ords and US markets are uncertain. 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:

 You can lead a horse to water, but you can't make him drink - Anon.

You can lead a man to knowledge, but you can't make him think - Jerri Shinnaman.







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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.