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Trading Diary
June 9, 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 .

Dow corrected back below the 9000 support level; closing down 0.9% at 8980 on lower volume. A false (marginal) break above resistance is a strong bear signal.
The intermediate trend is up.
The primary up-trend is up.

The S&P 500 retreated 15 points to close at 975.
The intermediate trend is up.
The primary trend is up.

The Nasdaq Composite gapped down 1.4% to close at 1603.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator jumped to 72.26% on June 6; 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.

Freddie Mac fires top two
The mortgage giant fired its president and chief financial officer for failing to cooperate with the audit committee reviewing past results. (more)

Motorola hit by SARS
The mobile phone maker blames poor market conditions in China for weak results. (more)

Pound stays
Chancellor of the Exchequer Gordon Brown tells parliament that Britain is not ready to adopt the euro, but says that the decision will be reviewed in 2004. (more)

New York (17.50): Spot gold has declined to $US 361.30.
On the five-year chart gold is above the long-term upward trendline.

ASX Australia
The ASX was closed Monday.

The intermediate trend is up.
The primary trend is down. A close above 3050 will signal an up-trend.

The monthly Coppock indicator has turned up below zero, signaling the start of a bull market. 
Twiggs Money Flow (100) has crossed to above zero, signaling accumulation.
MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is above its signal line; and Twiggs Money Flow (21) signals accumulation.

Market Strategy
Short-term: Long if the All Ords rises above 3021; 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.

Westpac [WBC]
Last covered on May 8, 2003.
Westpac has pulled back strongly after testing resistance at 16.90.

Twiggs Money Flow (100) and Twiggs Money Flow (21) both show bearish divergences.

Double tops and double bottoms occur fairly frequently on the above chart:
  • [a]-[b] signaled the end of a primary up-trend;
  • [c]-[d] gave a strong continuation signal in the down-trend;
  • [e]-[f] signaled a reversal back to an up-trend (the false break at [f] strengthened the signal).
Divergences on Twiggs Money Flow (21) also accompany most turning points.

The last rally at [1] displayed weak volume.
Volume strengthened on the pull-back, peaking with the downward gap at [2].
The doji candle on the following day indicates that the gap may have exhausted short-term momentum and another rally is likely.

If the rally is on thin volume and forms an equal or lower high, we may see the start of a secondary correction (intermediate down-trend).
A break above 16.90 would be bullish, but I would wait for a pull-back before taking further long entries.

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

Colin Twiggs

Success depends upon staying power.
The reason for failure in most cases is lack of perseverance.

- James Russell Miller.

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