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Trading Diary
April 1, 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 shows a small hook reversal; up 1% at 8069 on lower 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 formed an inside day, signaling uncertainty. The index closed 7 points higher at 1348.
The intermediate trend is down, despite the large correction.
The primary trend is up.

The S&P 500 also showed a hook reversal, closing 10 points up at 858.
The intermediate trend is down, but the trendline has been broken.
The primary trend is down.

The Chartcraft NYSE Bullish % Indicator is at 38% (March 31). 
The method of calculation has changed slightly.


Manufacturing slow-down 
The Institute for Supply Management index of manufacturing activity fell to 46.2 in March, from 50.5 in February. A reading of less than 50 signals contraction. (more)




Gold
New York (17.20): Spot gold eased to $US 334.50.



ASX Australia
The All Ordinaries closed down 5 points at 2844 on lower volume.
The intermediate up-trend has lost momentum, but the long shadow on the latest bar signals increased buying pressure. 
The primary trend is down.

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





Australian Stock Exchange Limited [ASX]
The ASX has been in a stage 3 top for the last 4 years. After twice testing resistance at 16.00 the stock has ranged between support at 10.00 and resistance at 14.00

100-day Twiggs Money Flow shows weakness.
Relative Strength (price ratio: xao) is level; while MACD and Twiggs Money Flow (21) both display bullish divergences at [A].





The daily equivolume chart shows the last reversal at [1], with strong volume and a long tail indicating increased buying support. The peak at [2] was on thin volume and has been followed by increased selling pressure at [3]. A lower high with a strong downward close at [4] signals that a re-test of support levels is likely.

If price respects the 10.00 support level, the stock may be expected to rally back to resistance at 14.00. A dry-up of volume and volatility near the support level will increase the likelihood of a rally.

A break below 10.00 would be bearish.





Market strategy
For further guidance see Understanding the Trading Diary.

Short-term: Long if the All Ords breaks above 2875; short if the break is below 2800.
Medium-term: Avoid new entries.
Long-term: Wait for confirmation of the bottom reversal signal.

Colin Twiggs


The most savage controversies are those about matters
as to which there is no good evidence either way.

- Bertrand Russell.







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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.