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Trading Diary
February 12, 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 .




 
USA
The Dow edged 1% lower to close at 7758 on average volume, approaching the 7500 support level.
The primary trend is down.

The Nasdaq Composite fell 1.3% to close at 1278. 
The next major support level is at 1200.
The primary trend is up (the last low was 1108, the last high 1521).

The S&P 500 lost 11 points to close at 818.
The index has formed a base between 768 and 964 but appears headed for a re-test of the support level.

The Chartcraft NYSE Bullish % Indicator is at 44% (February 11).
News Corp
News Corp reports second-quarter earnings, excluding one-off items, of 24 US cents per ADR, compared to 17 cents a year ago.



Gold
New York (16.18): Spot gold fell more than 10 dollars to $US 352.60.



ASX Australia
The All Ordinaries closed up 7 points at 2867 on higher volume.
The index is approaching a major support level, with a strong band of support between 2850 and 2779, and the likelihood of a short-term rally increases.

Slow Stochastic (20,3,3) has crossed below its signal line; MACD (26,12,9) is below; Twiggs Money Flow signals distribution.





Amcor Limited [AMC]
Last covered on May 8, 2002.
After equal highs at [A] and [D] AMC formed a triangular base at 5.00 before reversing into a stage 2 up-trend. The rally again halted at the 9.00 resistance level, with the stock forming a bearish descending triangle at [G].

Relative Strength (price ratio:xao) has levelled off, MACD is bearish and Twiggs Money Flow signals distribution.



The daily equivolume chart shows the descending triangle in more detail. There are numerous false breaks below the 8.00 support line; all on thin volume and retreating back above the support level by the following day.

AMC will give a strong bear signal if it breaks below 8.00 on reasonable volume and then respects the new resistance level from below. The shorter the duration of the pull-back, and the lighter the volume, the stronger the subsequent fall is likely to be.

A break above the high of [21] would be a bull signal.






Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Short if the All Ords falls below 2860. Slow Stochastic and MACD are below their respective signal lines but we are now approaching a strong support level.
Medium-term: Avoid new entries.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs


Weapons are the tools of violence;
all decent men detest them.

Weapons are the tools of fear;
a decent man will avoid them
except in the direst necessity
and, if compelled, will use them
only with the utmost restraint.
Peace is his highest value.
If the peace has been shattered,
how can he be content?
His enemies are not demons,
but human beings like himself.
He doesn't wish them personal harm.
Nor does he rejoice in victory.
How could he rejoice in victory
and delight in the slaughter of men?

He enters a battle gravely,
with sorrow and with great compassion,
as if he were attending a funeral.

- Lao Tse







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