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Trading Diary
September 18, 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 broke through the 8200 support level, but closed down only 0.4% at 8172 on strong volume. A rally before the close signaled uncertainty.
The primary cycle trends down.

The Nasdaq Composite Index also saw a late rally, closing 1.25% down at 1252, after earlier breaking below support at 1250.
The primary trend is down.

The S&P 500 broke through the 870 support level, closing 4 points lower at 869. 
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator  bull alert signal is at 46% (September 17).



JP Morgan
The second largest bank in the US issues a third-quarter earnings downgrade, blaming bad loans and poor trading revenue. (more)



Gold
New York: The spot gold price closed up $US 3.50 at $US 320.30, reflecting uncertainty in equity markets.



ASX Australia
The All Ordinaries closed more than 1% lower at 3071 on average volume. The market ranges between 3105 and 3030, signaling uncertainty.
The Slow Stochastic (20,3,3) crossed back below its signal line. Twiggs money flow slopes down.
The primary trend is down.





McGuigan Simeon Wines [MGW]
After a strong stage 2 up-trend MGW formed a triangle congestion pattern, failing to break above the February high. Price has rallied with strong volume over the past week, breaking above the upper boundary of the triangle pattern. Relative strength (price ratio: xao) is rising and Twiggs money flow is positive.





The daily chart shows MACD is rising, while the stock has pulled back in the last 2 days on weaker volume. There is strong resistance overhead at 5.15. We will have to see whether the current rally has the impetus to break above this level.






Conclusion

Short-term: Avoid new entries. The 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:

 The bigger the base, the bigger the move.
And the bigger the top, the bigger the drop.

 - old traders adage (from Stan Weinstein).






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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.