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Trading Diary
June 11, 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 rallied 1.4% to 9183 but on low volume. Another close above the 9000 support level further reduces the likelihood of a false (marginal) break.
The intermediate trend is up.
The primary up-trend is up.



The S&P 500 again tested the symbolic 1000 level, closing up 13 points at 997.
The intermediate trend is up.
The primary trend is up.

The Nasdaq Composite rallied 1.1% to close at 1646.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator eased slightly to 72.08% on June 10; a 3-box reversal would be a strong bear signal.

Market Strategy
Short-term: Long if the S&P 500 is above 984.
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.


Fed Beige Book
The "Beige Book" did not have much positive to say about the state of the economy, increasing hopes for a further rate cut from the June 24/25th Fed meeting. (more)




Gold
New York (17.03): Spot gold rose to $US 354.40.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
The All Ordinaries tested resistance at 3050 before retreating to close at 3037, up 14 points on strong volume.
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) signals accumulation.
MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is above; and Twiggs Money Flow (21) has completed a second bullish trough above zero.




Market Strategy
Short-term: Long if the All Ords is above 3021; take short positions 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.


Coles Myer [CML]
CML has been threatening to break out from a broad base for the past two months.

Twiggs Money Flow (100) signals accumulation and MACD (26,12,9) has completed a bullish trough above zero [+].



On May 6 [e] I said that a break below 6.50, the high of [b] and low of [d], would be bearish.
The following day, price broke below the support level on strong volume.

Relative Strength (price ratio: xao) has since shown a strong rise above zero and Twiggs Money Flow (21) signals accumulation.



The next bar [f] ended with a weak close on lower volume, signaling that the down-swing had lost momentum. This does not mean that you immediately become a bull; but patiently wait and gather evidence.
The following rally was very weak. Then CML consolidated in a narrow range below the resistance level; a bullish sign.
Finally, at [g] we receive confirmation with a break above the previous high on stronger volume.

The subsequent rally encountered selling pressure with square bars at [h].
The pull-back to support continues to show square bars, indicating strong buying absorbing the selling pressure.
The dry-up of volume at [i] is a bull signal. A buy-stop can be placed above the high; with a stop-loss a few ticks below 6.60.



CML continues to encounter selling pressure at 7.00, evidenced by the broad bar at [j].

A close above 7.00 will be a bull signal.
Consolidation between 6.60 and 7.00 would be a long-term bull signal.
A close below 6.60 would be bearish.





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

Colin Twiggs


Do you have the patience to wait
till the mud settles and the water is clear?
Can you remain unmoving
till the right action arises by itself?

- Lao Tse.



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