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Trading Diary
June 6, 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 formed a gravestone candle, closing 0.2% higher at 9062 on higher volume. The pattern signals short-term weakness and we are likely to see a re-test of the new 9000 support level.
The intermediate trend is up.
The primary up-trend is up.


The S&P 500 briefly flirted with the symbolic 1000 level before retreating to close 3 points down at 987. The index formed a similar reversal pattern to the Dow and is likely to re-test support at 950.
The intermediate trend is up.
The primary trend is up, with the index having broken above the high of [a] on strong volume [c].




The Nasdaq Composite shows a closing price reversal, losing more than 1% to close at 1627.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator climbed to 70.50% on June 5; following a Bull Correction buy signal (April 3).

Market Strategy
Short-term: Long if the S&P 500 is above 1000.
Intermediate: Long if the S&P is above 1000.
Long-term: Long - the S&P 500 primary trend has turned upwards after two bull signals: the March 17 follow through day and the April 3 NYSE Bullish % signal.

Unemployment
Unemployment levels increased to 6.1% in May, but job cuts are below forecasts. (more)




Gold
New York (15.30): Spot gold closed the week down at $US 363.60.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
On the long-term charts, the monthly Coppock indicator has turned up below zero, signaling the start of a bull market. 
MACD has completed a bullish trough above zero. 
Twiggs Money Flow (100) has crossed to above zero after a lengthy period of distribution.




Daily Chart:
After falling through the morning the All Ordinaries rallied to close up 10 points at 3018, but on disappointing volume.
The intermediate trend is up.
The primary trend is down. A close above 3050 will signal an up-trend.

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




Market Strategy
Short-term: Long if the All Ords rises above 3018; short if the XAO falls below 2908.
Intermediate: Long if the primary trend reverses up ( closes above 3050 ); 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.


Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 1 (RS is level)
  • Materials [XMJ] - stage 3 (RS is falling)
  • Industrials [XNJ] - stage 4 (RS is falling)
  • Consumer Discretionary [XDJ] - stage 1 (RS is level)
  • Consumer Staples [XSJ] - stage 1 (RS is level)
  • Health Care [XHJ] - stage 4 (RS is falling)
  • Property Trusts [XPJ] - stage 2 (RS is rising)
  • Financial excl. Property Trusts [XXJ] - stage 1 (RS is rising)
  • Information Technology [XIJ] - stage 4 (RS is falling)
  • Telecom Services [XTJ] - stage 4 (RS is level)
  • Utilities [XUJ] - stage 2 (RS is rising)


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) is up slightly to 61 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Banks (6)
  • Broadcasting & Cable TV (5)
  • Diversified Financial (4)


Daily Trading Diary
Stocks analyzed during the week were:
  • Kingsgate Consolidated - KCN
  • Sonic Health Care - SHL
  • Bank of Queensland - BOQ
  • Commonwealth Bank - CBA
  • Telecom New Zealand - TEL





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

Colin Twiggs


I have only a second rate brain,
but I think I have a capacity for action.

- Theodore Roosevelt, one of the most popular US Presidents.






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Colin Twiggs

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.