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Trading Diary
April 30, 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 failed to break above resistance within the bullish ascending triangle, retreating 0.3% to close at 8480 on higher volume.
The intermediate trend is down. A rise above 8587 will signal the start of an up-trend; a fall below 8109 will signal continuation.
March 17th's follow through remains valid (as long as the index holds above 7763).
The primary trend is down; a rise above 9076 will signal a reversal.

The Nasdaq Composite lost 7 points to close at 1464.
The intermediate trend is up; overhead resistance is at 1521.
The primary trend is up.

The S&P 500 closed almost unchanged; 1 point down at 916.
The intermediate up-trend continues.
The primary trend is down; a rise above 954 will signal a reversal.

The Chartcraft NYSE Bullish % Indicator is rising after a Bull Correction buy signal; up almost 1% at 51.76% (April 29). 

Market Strategy

Short-term: Long if the S&P 500 is above 922; short if the intermediate trend reverses down (or falls below 862).

Intermediate: Long if the Dow/S&P primary trend reverses upwards; short if the intermediate trend (S&P) reverses down.
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.

Greenspan
Alan Greenspan tells Congress that he sees signs of recovery but warns that business caution and high unemployment may inhibit. (more)

Gold
New York (18.14): Spot gold rallied strongly to $US 339.10.

ASX Australia

The ASX formed a doji star on higher volume; a fall below 2948 would signal a reversal. The index closed unchanged at 2971.
The intermediate up-trend continues.
The primary trend is down, although the trendline has been broken; a rise above 3062 will signal a reversal.

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is below; Twiggs Money Flow (21) has crossed below the upward trendline but continues to signal accumulation.

The monthly Coppock indicator continues downwards. 
An up-turn below zero would signal the start of a bull market.

Market Strategy

Short-term: Long if the index is above 2984; short if the intermediate trend reverses down (or XAO falls below 2910).

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. Wait for confirmation from a primary trend reversal.

West Australian Newspapers [WAN]
Consumer Discretionary sector, including several Media stocks, are showing signs of recovery.
WAN has formed a broad base after a stage 3 top in 1998. The stock formed a broad descending triangle but has held above support at 4.80.

Twiggs Money Flow (100-day) signals strong accumulation, especially from [c] to [g]. 

For the past 18 months WAN has consolidated in a narrow range between 5.30 and 4.80.

MACD and Twiggs Money Flow (21) are bullish.
Relative Strength (price ratio: xao) is rising.

If we analyze the last month using equivolume, there are several positive signs:

• WAN encountered strong selling pressure at [1] but overcame this without any significant retracement;
• the stock rallied strongly to [3];
• the weak correction to [4] signals strong buying support;
• again, at [5], WAN was able to overcome selling pressure to break above resistance;
• the rally ran out of steam at [6] but the correction was short and volume dried up at [8];
• price is consolidating just below the resistance level, with 2 more tests of resistance, albeit on light volume.

Aggressive short-term traders may find entry points if volume and volatility dry up on a correction below the resistance level.
More conservative traders may enter on a break above 5.30; possibly adding to the position on a subsequent pull-back, if it respects the new support level.

A break below 5.15 would be bullish.

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

Colin Twiggs

As far as the laws of mathematics refer to reality, they are not certain;
and as far as they are certain, they do not refer to reality.

- Albert Einstein.

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