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Trading Diary
January 10, 2003

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 .

The Dow closed almost unchanged at 8784 on lower volume.
The average is forming a base between 7500 and 9130. Recently, it has held above 8161 and failed to re-test support at 7500; a bullish sign.
The primary trend is down and will only reverse up if the average rises above 9076 (the high from December 02).

The Nasdaq Composite fared better, gaining 9 points to close at 1447.
The primary trend is up.

The S&P 500 closed unchanged at 927.
The index ranges between 965 and 768, establishing a base. It has recently held above 867, failing to re-test support at the lower end of the base; a bullish sign. 

The Chartcraft NYSE Bullish % Indicator increased to 52% (January 09).

Further job cuts keep unemployment at 6%; an 8-year high. (more)

New York: Spot gold gained 230 cents to $US 354.40

ASX Australia
The All Ordinaries formed a doji, after testing resistance at 3050, and closed almost unchanged at 3035 on lower volume.
The index ranges between 2915 and 3050, forming a base. A break above 3050 will signal a primary trend change to an up-trend. Look for volume confirmation.
Slow Stochastic (20,3,3) is below its signal line; MACD (26,12,9) is above; Twiggs money flow is falling.

Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 4 (RS is level)
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 2 (RS is rising)
  • Consumer Staples [XSJ] - stage 4 (RS is level)
  • Health Care [XHJ] - stage 1 (RS is level)
  • Property Trusts [XPJ] - stage 2 (RS is rising)
  • Financial excl. Property Trusts [XXJ] - stage 4 (RS is falling)
  • Information Technology [XIJ] - stage 4 (RS is falling)
  • Telecom Services [XTJ] - stage 4 (RS is falling)
  • Utilities [XUJ] - stage 2 (RS is rising)

Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) returned 72 stocks (compared to 99, August 23rd and 10 on October 4th). Notable sectors are:
  • Electric Utilities
  • Health Care
  • Publishing
  • Highways & Railtracks
  • Diversified Commercial
  • Construction & Engineering
  • Construction Materials
  • Diversified Metals & Mining
  • Oil & Gas Exploration
  • Gold

Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Avoid new entries. The Slow Stochastic and MACD are on opposite sides of their respective signal lines.
Medium-term: Avoid new entries.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs

The only place where success comes before work
is in the dictionary.

- Proverb from Ruth Barrons Roosevelt: Exceptional Trading - The Mind Game

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