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Trading Diary
April 10, 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 rallied slightly, gaining 0.3% to close at 8221 on lower
volume.
The intermediate trend is down. A rise above 8552 will signal a reversal to an up-trend; a fall below 7903 will signal continuation.
Monday 17th's follow through remains valid (as long as the index holds above 7763).
The primary trend is down.
The Nasdaq Composite gained 9 points to close at 1365.
The intermediate trend is down. A rise above the equal highs at 1430 will signal a reversal; a fall below 1336 will signal continuation.
The primary trend is up.
The S&P 500 closed up 6 points at 871.
The intermediate trend is down, until the index breaks above 904.
The primary trend is down.
The Chartcraft NYSE Bullish % Indicator is at 46% (April 9), after completing a Bull Correction buy signal.
The intermediate trend is down. A rise above 8552 will signal a reversal to an up-trend; a fall below 7903 will signal continuation.
Monday 17th's follow through remains valid (as long as the index holds above 7763).
The primary trend is down.
The Nasdaq Composite gained 9 points to close at 1365.
The intermediate trend is down. A rise above the equal highs at 1430 will signal a reversal; a fall below 1336 will signal continuation.
The primary trend is up.
The S&P 500 closed up 6 points at 871.
The intermediate trend is down, until the index breaks above 904.
The primary trend is down.
The Chartcraft NYSE Bullish % Indicator is at 46% (April 9), after completing a Bull Correction buy signal.
Strategy
Short-term: Long if the Dow rises above 8552; short if the Dow
falls below 7903.
Intermediate: Long if the Dow/S&P primary trend reverses
upwards; short if the Dow falls below 7903.
Long-term: There are already two bull signals: the March 17 follow through day and the NYSE Bullish % signal. Wait for confirmation from a Dow/S&P primary trend reversal.
Long-term: There are already two bull signals: the March 17 follow through day and the NYSE Bullish % signal. Wait for confirmation from a Dow/S&P primary trend reversal.
Iraq and the economy
As the influence of the war fades the markets are refocusing on the domestic economy which remains weak. New unemployment claims remain above 400,000 for last week, signaling that the economy is still contracting. (more)
Boeing
The aerospace and defense manufacturer takes a $1.2 billion charge, reflecting the downturn in commercial aviation. (more)
As the influence of the war fades the markets are refocusing on the domestic economy which remains weak. New unemployment claims remain above 400,000 for last week, signaling that the economy is still contracting. (more)
Boeing
The aerospace and defense manufacturer takes a $1.2 billion charge, reflecting the downturn in commercial aviation. (more)
Gold
New York (19.16): Spot gold eased to $US 325.30.
New York (19.16): Spot gold eased to $US 325.30.
ASX Australia
The All Ordinaries fell sharply but recovered to close above the
intermediate trendline; 11 points down at 2905 on lower
volume.
The intermediate up-trend continues. Lower volume and a weak close (long shadow) on the correction indicate that the trend is likely to continue.
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 accumulation.
The intermediate up-trend continues. Lower volume and a weak close (long shadow) on the correction indicate that the trend is likely to continue.
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 accumulation.
Strategy
Short-term: Long if the index rises above 2916 (keep stops tight
in case of a false break above the long-term trendline); short if
the intermediate trend reverses down.
Intermediate: Long if the primary trend reverses up (XAO above
3062); short if the intermediate trend reverses down.
Long-term: There is already a bull signal: the March 18 follow through day. Wait for confirmation from the primary trend reversal.
Long-term: There is already a bull signal: the March 18 follow through day. Wait for confirmation from the primary trend reversal.
News Corporation [NCP]
Last covered on March 5, 2003.
My thoughts on reading of the acquisition of DirecTV were: "this should give NCP a boost". The market took a different view, with the stock falling almost 9% on strong volume to close at 10.70. This just serves to confirm: don't follow your hunches, follow the tape.
Relative Strength (price ratio: xao) has leveled; MACD is positive; Twiggs Money Flow (21) has retreated below zero.
Last covered on March 5, 2003.
My thoughts on reading of the acquisition of DirecTV were: "this should give NCP a boost". The market took a different view, with the stock falling almost 9% on strong volume to close at 10.70. This just serves to confirm: don't follow your hunches, follow the tape.
Relative Strength (price ratio: xao) has leveled; MACD is positive; Twiggs Money Flow (21) has retreated below zero.
Stops below 11.50 or 11.14 would have been
activated, so there is no decision-making left for some
short-term traders. But some with a longer-term view may be
sitting with stops below 10.45, the low of [8].
The best approach is to stick to your trading plan; do not tinker with your stops. The intermediate trend has not yet reversed and a gap up/down on big volume often exhausts short term momentum. The next few days will provide some clues:
A fall below 10.45 would be a clear bear signal and may provide an opportunity to go short with a target of 9.20.
Conversely, a rally above the high of [11] would be a bull signal, with a target of 13.00.
The best approach is to stick to your trading plan; do not tinker with your stops. The intermediate trend has not yet reversed and a gap up/down on big volume often exhausts short term momentum. The next few days will provide some clues:
- an inside day on Friday would signal exhaustion;
- a downward day following the inside day may be a false move, especially if on low volume;
- an upward move after the false downward move would be a bull signal;
- a strong downward day on Friday would be bearish.
A fall below 10.45 would be a clear bear signal and may provide an opportunity to go short with a target of 9.20.
Conversely, a rally above the high of [11] would be a bull signal, with a target of 13.00.
For further assistance see Understanding the Trading Diary.
Colin Twiggs
While we stop and think, we often miss our opportunity.
- Publius Syrus (1st century B.C.).
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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.