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Trading Diary
February 24, 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 closed 2% down at 7858 on lower volume, still in the congestion zone. 
The next support level is 7500.
The primary trend is down.

The Nasdaq Composite formed an inside day, signaling uncertainty, and closed down 2% at 1322.
The primary trend is up.

The S&P 500 also weakened, closing 16 points down at 832. The current congestion signals uncertainty. 
The next support level is at 768.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator is at 42% (February 21).


Oil at 2-year high
Oil is trading around $US 36 per barrel, because of the threat of supply disruption. (more)




Gold
New York (16.57): Spot gold is up 660 cents at $US 357.10.



ASX Australia
The All Ordinaries closed 33 points up at 2837. Low volume signals that the rally will have difficulty overcoming the 2850 resistance level. The next support level is at 2779 (from October 1999).

Slow Stochastic (20,3,3) continues to whipsaw around its signal line; MACD (26,12,9) is below. Twiggs Money Flow again crossed above its trendline, forming a small bullish divergence.





News Corporation [NCP]
Last covered on February 10, 2003.
The most significant stock in the Consumer Discretionary sector, NCP completed a double bottom at [4] and [5] after a long stage 4 down-trend. The long-term trendline was broken at [W] which also completed the double bottom. The stock then rallied to a high at [6] but failed to exceed this, with a lower high at [7] and then completed a double top pattern, signaling trend reversal. The stock is currently testing the 11.00 support level.

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





Equivolume shows how price initially broke below support at [11]. The pull-back to [13] displayed fair volume but the primary trend move back below 11.00 was far stronger [13]. Volume has dried up on subsequent pull-backs, at [14] and [15], and price appears likely to respect the 11.00 resistance level.

A break below the low of 10.58 will be a strong bear signal, signaling a likely re-test of support at 8.50 (from [4] and [5] on the weekly chart).






Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Short if the All Ords falls below 2800. Slow Stochastic and MACD are below their respective signal lines.
Medium-term: Avoid new entries.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs


Beware of little expenses. 
A small leak will sink a great ship.

- Benjamin Franklin







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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.