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Trading Diary
May 22, 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 broke through resistance at 8523 on high
volume, up 0.9% at 8594 at the close.
The intermediate upward trendline has been broken. A rise above 8766 will signal continuation; a fall below 8394 will signal a reversal.
The primary trend is down; a rise above 9076 will signal a reversal.
The intermediate upward trendline has been broken. A rise above 8766 will signal continuation; a fall below 8394 will signal a reversal.
The primary trend is down; a rise above 9076 will signal a reversal.
The S&P 500 gained 8 points to 931 at
closing.
The intermediate upward trend is weak. A fall below 912 will signal reversal; a rise above 948, continuation.
The primary trend is down; a rise above 954 will signal an up-trend.
The intermediate upward trend is weak. A fall below 912 will signal reversal; a rise above 948, continuation.
The primary trend is down; a rise above 954 will signal an up-trend.
The Nasdaq Composite rallied 1.2% to 1507 at the
close.
The intermediate trend is weak. A fall below 1478 will signal a down-trend; a rise above 1552 will signal continuation.
The index is in a primary up-trend.
The intermediate trend is weak. A fall below 1478 will signal a down-trend; a rise above 1552 will signal continuation.
The index is in a primary up-trend.
The Chartcraft NYSE
Bullish % Indicator recovered to 61.49% on May 21, following
a Bull
Correction buy signal on April 3.
Market Strategy
Short-term: Long if the S&P 500 rises above
954; short if the S&P intermediate trend falls below
912.
Intermediate: Long only when 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.
Final tax cut
The House of Representatives and Senate leaders reach agreement on a $US 350 billion tax cut. (more)
The House of Representatives and Senate leaders reach agreement on a $US 350 billion tax cut. (more)
TV advertising up
Advanced sales of TV advertising for the 2003-2004 season are up almost 10%. (more)
Advanced sales of TV advertising for the 2003-2004 season are up almost 10%. (more)
Gold
New York (16.04): Spot gold retreated to $US 367.60.
On the five-year chart gold has respected the long-term upward trendline.
New York (16.04): Spot gold retreated to $US 367.60.
On the five-year chart gold has respected the long-term upward trendline.
ASX Australia
The All Ordinaries rallied off the false break
on big volume, closing up 21 points at 2936.
The intermediate trend is down but on a weak signal.
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 rising.
The intermediate trend is down but on a weak signal.
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 rising.
Market Strategy
Short-term: Long if the All Ords rises above
2964; short if the XAO falls below 2908.
Intermediate: Long if the primary trend reverses up (XAO above 3062); short if the XAO is below 2908.
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 2908.
Long-term: There is already a bull signal: the March 18 follow through. Wait for confirmation from a primary trend reversal.
Ridley Corporation [RIC]
Last covered on December 19, 2002.
Ridley has been in a stage 2 up-trend for the past 2 years. It has now started a correction after a marginal new high.
Twiggs Money Flow (100) shows a slight bearish divergence after a lengthy period of strong accumulation.
Last covered on December 19, 2002.
Ridley has been in a stage 2 up-trend for the past 2 years. It has now started a correction after a marginal new high.
Twiggs Money Flow (100) shows a slight bearish divergence after a lengthy period of strong accumulation.
Relative Strength (price ratio: xao) appears to
be turning downwards; MACD and Twiggs Money Flow (21-day) show
bearish divergences.
Note the entry points at [a] and [d] on the daily chart: both volume and daily range dried up above the long-term supporting trendline.
The pennant at [b] signaled continuation.
Exits could be taken at [c] and [e] when price penetrated the intermediate trendline.
The marginal high at [f] made a gain of only 1 cent before retreating.
RIC has now reached the supporting trendline; the daily range has narrowed but volume is still high. This is a pivotal point: if price rallies above the long-term trendline we could see another intermediate up-swing.
Note the entry points at [a] and [d] on the daily chart: both volume and daily range dried up above the long-term supporting trendline.
The pennant at [b] signaled continuation.
Exits could be taken at [c] and [e] when price penetrated the intermediate trendline.
The marginal high at [f] made a gain of only 1 cent before retreating.
RIC has now reached the supporting trendline; the daily range has narrowed but volume is still high. This is a pivotal point: if price rallies above the long-term trendline we could see another intermediate up-swing.
However, a fall below support at 1.40 would be
bearish.
And a fall below 1.32, completing the double top pattern, from [c] to [f], would be a strong bear signal.
And a fall below 1.32, completing the double top pattern, from [c] to [f], would be a strong bear signal.
New! Understanding
the Trading Diary has been expanded to offer further
assistance to readers.
Colin Twiggs
It does not do to leave a dragon out
of
your calculations, if you live near him.
- J.R.R. Tolkien, The Hobbit
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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.