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Trading Diary
April 15, 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 .

The Dow rallied 0.6% to close at 8402 on higher volume. The index has formed a bullish ascending triangle with resistance at 8552.
The intermediate trend is down. A rise above 8552 will signal 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 0.4% to close at 1391.
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 5 points at 890.
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 14), after completing a Bull Correction buy signal. 

Market Strategy
Short-term: Long if the Dow rises above 8552; short if the Dow falls below 8109.
Intermediate: Long only when the Dow/S&P primary trend reverses upwards; short if the Dow falls below 8109.
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.

Industrial output falls
Industrial production fell a sharp 0.5% in March, according to the Federal Reserve, after a 0.1% fall in February. (more)

Intel reports first-quarter earnings of 14 cents a share, against expectations of 12 cents. (more)

New York (20.50): Spot gold is down at $US 323.40.

ASX Australia
The All Ordinaries rallied to 2932 on higher volume.
The intermediate up-trend continues. The index is testing the long-term downward trendline and the intermediate trendline has been broken; so we should be alert for signs of a reversal. 
The primary trend is down.

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

Market Strategy
Short-term: Long, provided that the index remains above 2918 (keep stops tight in case of a false break); short if the index falls below 2888.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the intermediate trend reverses down (below 2888).
Long-term: There is already a bull signal: the March 18 follow through day. Wait for confirmation from the primary trend reversal.

ANZ Bank [ANZ]
Last mentioned on March 25, 2003.
In February 2003 ANZ broke downwards from a stage 3 descending triangle which had formed after a long up-trend.
This turned out to be a bear trap, with price breaking back above resistance at 17.00 and penetrating the upper border of the triangle.

Relative Strength (price ratio: xao) is rising; Twiggs Money Flow (100) shows accumulation after a bullish divergence.

The downward trendline [A] - [G] has been penetrated after a higher low at [L]. The high at [M] is followed by a trough which respects the trendline. 

MACD and Twiggs Money Flow (21) are bullish.

The pull-back to [14], after the high at [13], is on light volume and of short duration (4 days); and price held above support at 17.60. The stock appears to be respecting the long-term downward trendline from above. A break above the high of 18.68 will be a bullish signal and have a target of 20.60 [A].

A break below 17.60 would be bearish.

Earlier bullish signs were:
  • The double bottom at [1] and [2];
  • The strong upward bar at [2];
  • The double bottom at [4] and [6], higher than the earlier pattern;
  • Strong volume on the break above resistance at [7];
  • Light volume on the pull-back that respected the support level at [9] - a strong bull signal;
  • Strong volume on subsequent up days;
  • The correction to [11] respects support from the previous high.

New! Understanding the Trading Diary has been expanded to offer further assistance to readers.
Colin Twiggs

The key to success in most sports is to perform the basics better than anyone else:
study each movement; break it down into its component parts; and practice until you master it.
The same holds true for trading stocks.

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