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Trading Diary
May 8, 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 lost 0.8% to close at 8491 on lower volume.
The intermediate trend is down. I prefer to wait for a clear break above resistance (8600) to signal the start of an up-trend. A fall below 8328 will signal continuation.
The primary trend is down; a rise above 9076 will signal a reversal.

The S&P 500 fell 9 points to close at 920.
The slow intermediate up-trend continues, with resistance overhead at 935.
The primary trend is down; a rise above 954 will signal a reversal.

The Nasdaq Composite retreated 1.1% to close at 1489.
The intermediate trend is up, with resistance overhead at 1521.
The primary trend is up.

The Chartcraft NYSE Bullish % Indicator continues to rise, reaching 56.99% on May 7, following a Bull Correction buy signal on April 3. 

Market Strategy

Short-term: Long if the S&P 500 rises above 929; short if the S&P intermediate trend reverses down (or falls below 897).

Intermediate: Long only when 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 April 3 NYSE Bullish % signal. Wait for confirmation from a Dow/S&P primary trend reversal.

Jobless claims fall
New jobless claims fell to 425,000 for the week ended May 3; below expectations but still above the 400,000 benchmark. (more)

Gold
New York (16.44): Spot gold rallied strongly to $US 348.10.
On the five-year chart gold has respected the long-term upward trendline.

ASX Australia

The All Ordinaries penetrated support at 2926 before recovering to close at 2928 on above-average volume; down 16 points.
The intermediate up-trend is weakening; a break below Monday's low of 2926 will signal a reversal.
The primary trend is down. A rise above 3062 will signal reversal to an up-trend.

MACD (26,12,9) and Slow Stochastic (20,3,3) are below their signal lines and the Stochastic has fallen below 80%, a further bear signal; Twiggs Money Flow (21) is falling.

Market Strategy

Short-term: Short if the XAO falls below 2926.

Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the XAO falls below 2926.
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.

Banks
The financial index (excl. property) XXJ displays a strong bear signal, with a break below support at [1] after a weak rally at [2].

The sector includes AMP, however, and we should look at the individual charts to see how the rest are faring.

 

Both ANZ and Westpac appear to have encountered resistance.
Examining weekly volume, we can see that volume declined towards the end of the last rally.

Similar declines can be observed on CBA and NAB.

We may see a re-test of support before the sector makes further gains.

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

Colin Twiggs

History may not repeat itself, but it does rhyme a lot.

- Samuel L Clemens (Mark Twain).

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