Sector Analysis

Explains how to use the [Sectors ASX 200] project file
and how to set up Sector Comparison charts.

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 formed an inside day, closing 0.8% up at 8280 on average volume. Monday 17th's follow through signal remains valid so long as the index holds above 7763. 
The intermediate cycle is down, although the trendline has been broken.
The primary trend is down.

The Nasdaq Composite gained 1.5% to close at 1391.
The intermediate trend is down, despite the large correction.
The primary trend is up.

The S&P 500 formed an inside day, gaining 10 points to close at 874.
The intermediate trend is down, but the trendline has been broken.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator remains at 36% (March 24).

Consumer confidence continues to fall
The Conference Board consumer confidence index fell to 62.5 from 64.8 in February; in line with expectations. (more)

Senate slashes tax cuts
Concerned about the growing budget deficit, the Senate votes to halve President Bush's $US 726 billion tax cut plan.  (more)

ASX Australia

The All Ordinaries closed 7 points down at 2822 on lower volume. The hammer signals that the counter-trend is weak.
The intermediate trend is down, despite the break above the trendline.
The primary trend is down.

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) has crossed to below; Twiggs Money Flow (21) signals distribution.

Banks
The Financial Sector is recovering faster than the other sector indices.
The 6-month price comparison chart reveals that
SGB,
WBC and
BOQ are the strongest performers in the sector. Also of interest are
ANZ and 
NAB, while
CBA,
ADB,
BEN and
BWA still show weakness.

 

St George Bank [SGB] has rallied above the long-term trendline and threatens a break above 19.00.

Westp[ac [WBC] is testing resistance at 14.67 after a double bottom at [A] and [E].

Bank of Queensland [BOQ] has broken above resistance at 7.10 after completing a symmetrical triangle.

Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Long if the All Ords rises above 2829.

Medium-term: Avoid new entries.

Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs

In any moment of decision, the best thing you can do is the right thing.
The worst thing you can do is nothing.

- Theodore Roosevelt.

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