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Trading Diary
May 20, 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
After an initial drop, the Dow rallied in
afternoon trade to close almost unchanged at 8491 on higher
volume.
The intermediate upward trendline has been broken, signaling weakness.
The primary trend is down; a rise above 9076 will signal a reversal.
The intermediate upward trendline has been broken, signaling weakness.
The primary trend is down; a rise above 9076 will signal a reversal.
The S&P 500 closed 1 point lower at
919.
The intermediate upward trendline is broken, signaling weakness.
The primary trend is down; a rise above 954 will signal an up-trend.
The intermediate upward trendline is broken, signaling weakness.
The primary trend is down; a rise above 954 will signal an up-trend.
The Nasdaq Composite staged a similar late
rally, closing 1 point down at 1491.
The intermediate trend is up, but weakening.
The index is in a primary up-trend.
The intermediate trend is up, but weakening.
The index is in a primary up-trend.
The Chartcraft NYSE
Bullish % Indicator is almost unchanged at 61.32% on May 19,
following a Bull
Correction buy signal on April 3.
Market Strategy
Short-term: 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.
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.
The Dollar and the Treasury
Secretary
Treasury Secretaries who have come from an industry background tend to favor a weak dollar; to stimulate exports. Those who come from Wall Street favor a strong dollar; to protect the stock and bond markets. (more)
Treasury Secretaries who have come from an industry background tend to favor a weak dollar; to stimulate exports. Those who come from Wall Street favor a strong dollar; to protect the stock and bond markets. (more)
HP beats estimates
Hewlett-Packard, who last year merged with Compaq, reported first quarter earnings of 29 cents a share; two cents above analysts estimates. The PC-maker is still cautious about the sales outlook, but far less so than in the last quarter. (more)
Hewlett-Packard, who last year merged with Compaq, reported first quarter earnings of 29 cents a share; two cents above analysts estimates. The PC-maker is still cautious about the sales outlook, but far less so than in the last quarter. (more)
Gold
New York (18.09): Spot gold continues to climb; currently at $US 368.20.
On the five-year chart gold has respected the long-term upward trendline.
New York (18.09): Spot gold continues to climb; currently at $US 368.20.
On the five-year chart gold has respected the long-term upward trendline.
ASX Australia
The All Ordinaries dropped to below 2900 at the opening but later
rallied to close back at the 2909 support level.
The intermediate trend has reversed downwards but on a weak signal. A false break is often followed by a rally; so traders need to stay alert.
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) is below; Twiggs Money Flow (21) is weakening.
The intermediate trend has reversed downwards but on a weak signal. A false break is often followed by a rally; so traders need to stay alert.
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) is below; Twiggs Money Flow (21) is weakening.
Market Strategy
Short-term: Long if the All Ords rises above 2923; short if the
XAO falls below 2909.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the XAO is below 2909.
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the XAO is below 2909.
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.
MIA Group [MIA]
Last mentioned on April 29, 2003.
It is too early to say that MIA has formed a reversal, but it has broken above its downward trendline and long-term moving average; and Twiggs Money Flow (100-day) has kicked up sharply, reflecting strong accumulation.
Last mentioned on April 29, 2003.
It is too early to say that MIA has formed a reversal, but it has broken above its downward trendline and long-term moving average; and Twiggs Money Flow (100-day) has kicked up sharply, reflecting strong accumulation.
Relative Strength (price ratio: xao) does not yet show a major
recovery, but MACD shows a strong bullish divergence and Twiggs
Money Flow (21-day) signals accumulation.
The first rally off a new low is only suitable for aggressive short-term traders who are prepared to get out at the first sign of trouble -- such as a trendline break.
The first rally off a new low is only suitable for aggressive short-term traders who are prepared to get out at the first sign of trouble -- such as a trendline break.
The equivolume chart shows very high volume at the shakeout at
[3].
The false break at [4] failed to close below the previous low and is followed by a fast rally to [5].
Price has encountered resistance at 0.72, the high of [1].
There is also further overhead resistance at 0.80.
The false break at [4] failed to close below the previous low and is followed by a fast rally to [5].
Price has encountered resistance at 0.72, the high of [1].
There is also further overhead resistance at 0.80.
I expect that MIA will build a broader base, re-testing support
at 0.48, before entering a stage 2 rally.
But a break above 0.72 on strong volume may prove me wrong.
But a break above 0.72 on strong volume may prove me wrong.
New! Understanding
the Trading Diary has been expanded to offer further
assistance to readers.
Colin Twiggs
The art of making your dream a reality
is simply remaining committed long enough
for reality to catch up to your dream.
- R Fleming.
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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.