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Trading Diary
March 7, 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
After falling to 7562 at the opening, the Dow rallied to close up 0.8% at 7740 on very strong volume.
The intermediate cycle is down; the next support level is at 7500.
The primary trend is down.

The Nasdaq Composite formed a strong closing price reversal,  closing 3 points higher at 1305.
The intermediate trend is down, with the next support level at 1200.
The primary trend is up.

The S&P 500 gained 6 points to close at 828.
The intermediate trend is down.
The primary trend is down; the next support level is at 768.

The Chartcraft NYSE Bullish % Indicator is at 40% (March 6).


Unemployment rise
Unemployment rose to 5.8% from 5.7% in January, raising expectations of further interest rate cuts. (more)




Gold
New York (16.00): Spot gold lost 590 cents to close at $US 350.10.



ASX Australia
On the weekly chart the All Ordinaries has broken below the 2850 to 2779 support band and is likely to weaken further. The next support level is just below 2400, and the target for the double top pattern is 2200.





On the daily chart the index lost a further 32 points to close at 2715 on lower volume.

Slow Stochastic (20,3,3) and MACD (26,12,9) are below their signal lines. The small divergence on Twiggs Money Flow has ended and the indicator signals distribution.





Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 4 (RS is rising)
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 1 (RS is falling)
  • Consumer Staples [XSJ] - stage 4 (RS is rising)
  • Health Care [XHJ] - stage 4 (RS is falling)
  • 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)
On the 3-month sectors chart below, Utilities is the only sector that is still positive.




Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) returned 15 stocks (compared to 99 on August 23, 2002; and 10 on October 4, 2002).
Two of the stocks were from Construction Materials.


Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Short. 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


Man is a Religious Animal. He is the only Religious Animal.
He is the only animal that has the True Religion - several of them.
 He is the only animal that loves his neighbor as himself
and cuts his throat if his theology isn't straight.

- Samuel Clemens ("Mark Twain")







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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.