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Trading Diary
May 14, 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 retreated 0.4% to close at 8647 on average volume.
The intermediate trend is up.
The primary trend is down; a rise above 9076 [a] will signal a reversal.

The S&P 500 lost 3 points to close at 939.
The intermediate up-trend continues.
The primary trend is down; a rise above 954 will signal an up-trend.

The Nasdaq Composite lost 0.3% to close at 1534.
The intermediate trend is up.
The break above 1521 provides clear confirmation that the index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator continues to climb, reaching 59.47% on May 13, following a Bull Correction buy signal on April 3. 

Market Strategy

Short-term: Long if the S&P 500 is above 947; short if the S&P intermediate trend reverses down (or falls below 898).

Intermediate: Long if the Dow/S&P primary trend turns 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.

Gold
New York (17.56): Spot gold is back up at $US 352.30.
On the five-year chart gold has respected the long-term upward trendline.

ASX Australia

The All Ordinaries lost 9 points to close at 2952 on average volume.
The intermediate up-trend is weak; a close below 2909 will signal a reversal.
The primary trend is down. A rise above 3062 will signal an up-trend.

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

Market Strategy

Short-term: Short if the XAO is below 2939.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the intermediate trend reverses down (falls below 2909).
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.

Telecom New Zealand [TEL]
TEL is building a broad stage 1 base, from [4] to [13], after a lengthy stage 4 down-trend.
The stock made a marginal break below support at [13] before rallying to test resistance at 4.40.

Twiggs Money Flow (100-day) signals strong accumulation.

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

The equivolume chart shows that TEL made several tests of resistance at 4.30, from [b] to [e], before price gapped up at [f].
The pull-back to [g] shows signs of ending and there may be entry opportunities (short-term) if TEL rises above 4.41.

Even if price pulls back further, there may still be entry opportunities provided that:

• the pull-back is short;
• on low volume; and
• respects support at 4.30.

A break below 4.30 would be bearish.

Longer-term traders may prefer to wait for a break above resistance at 4.60.

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

Colin Twiggs

Millions saw the apple fall, 
but Newton was the one who asked why.

- Bernard Baruch.

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