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Trading Diary
September 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 gained 2 % to close just below the 8000 resistance level, at 7997 on strong volume.
The primary cycle trends down.

The Nasdaq Composite Index rallied in morning trading but then weakened to close 1 point lower at 1221.
The primary trend is down.

The S&P 500 gained 15 points to close at 854.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator reflects a bear confirmed signal at 34% (September 25).



Brighter economic news
Jobless claims fell by 24,000 last week; the decline in durable goods orders was a lower than expected 0.6%; and home sales rose to a record 996,000 last month. (more)




Gold
New York: The spot gold price closed down 190 cents at $US 320.40.



ASX Australia
The rally on the All Ordinaries failed with the index closing 1 point down at 2946 on above-average volume, with support at 2940.
The MACD (26,12,9) and Slow Stochastic (20,3,3) are below their signal lines. Twiggs money flow signals distribution.
The primary trend is down.





Caltex Australia [CTX]
CTX has formed a stage 1 base after a lengthy down-trend. After rallying off a low of $0.90 the stock has formed a triangle congestion pattern; a bullish sign as the stock has not retreated back to support at 1.00. Wait for relative strength (price ratio: xao) to resume its upward rise.





MACD and Twiggs money flow appear unconvinced, fluctuating around the zero line.





Equivolume clearly shows support at 1.65 with no closes below this level. A close below 1.65 would be bearish, while a breakout above 1.83 will be a strong bull signal.






Conclusion

Short-term: The US market should have a positive effect on the local market. Avoid short unless the XAO falls below 2940. 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:

 We Japanese are obsessed with survival.

 - Akio Morita, founder of Sony.
(We traders should also be obsessed with survival)






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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.