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Trading Diary
June 19, 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 fell 1.2% to 9179, on encouragingly lower volume. The index appears to be headed for a re-test of the 9000 support level.
The intermediate trend is up.
The primary up-trend is up.

 


The S&P 500 closed below the 1000 support level, 1.5% down at 994.
The intermediate trend is up. The break of the trendline and support level signals weakness.
The primary trend is up.

The Nasdaq Composite fell 1.7% to close at 1648.
The intermediate trend is up.
The index is in a primary up-trend.

The Chartcraft NYSE Bullish % Indicator eased slightly to 74.94% on June 18.

Market Strategy
Short-term: Long if the S&P 500 is above 1011.
Intermediate: Long if the S&P is above 1011.
Long-term: Long.


"Triple Witching" tomorrow
There was more profit-taking ahead of Friday's triple-witching hour.

Jobless claims
New jobless claims fell to 421,000 for the week ended June 14th, but are still well above the key 400,000 level, which indicates rising unemployment.
(more)




Gold
New York (17.27): Spot gold recovered to $US 361.80.
On the five-year chart gold is above the long-term upward trendline.



ASX Australia
The All Ordinaries formed an inside day on strong volume; closing up 13 points at 3071. A pennant pattern in an up-trend (especially when formed above a key support level) would normally signal continuation, but volume has not dried up as expected. There may still be a further re-test of the 3050 support level.
The intermediate trend is up.
The primary trend is up.

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 below; and Twiggs Money Flow (21) signals accumulation, having completed two bullish troughs above zero.




Market Strategy
Short-term: Long if the All Ords is above 3071.
Intermediate: The primary trend has reversed up; Long if the All Ords is above 3071.
Long-term: The primary trend reversal has confirmed the March 18 follow through signal. Long.


Bank of Queensland [BOQ]
BOQ has broken out below the flag pattern on higher volume.

Twiggs Money Flow (21-day) signals distribution; MACD (26,12,9) is below its signal line.
Relative Strength (price ratio: xao) continues to fall, from its peak at the start of June.



Some traders may have taken short positions on the break below the flag pattern; the target would be the primary trendline at 7.20.
With an overall bullish market this position is fairly risky and they will need to protect against a bear trap - where price reverses back above the flag and resumes the up-trend.

A fall below 8.50 (the latest low) will be bearish
A rise above 8.73 (the high of latest bar) would signal uncertainty.
A rise above the upper border of the flag will be a bull signal.


Harvey Norman [HVN]
HVN has rallied above the long-term downward trendline and formed a V-bottom.

Twiggs Money Flow (100-day) has edged back above zero, to signal accumulation.
Relative Strength (price ratio: xao) is rising.



Overhead resistance is at 2.70.
MACD (26,12,9) shows a bullish divergence at [D].



V-bottoms normally lead to a re-test of support levels. In the current bull market this may mean a correction back to 2.20 or 2.40. 
Volume has been lower in recent weeks, reinforcing the likelihood of a pull-back.
Opportunities to go long may present themselves if volume and volatility dry up at the support levels, during a pull-back.

A fall below 2.20 would be bearish.





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

Colin Twiggs


Genius is only the power of making continuous efforts.
The line between failure and success is so fine
that we scarcely know when we pass it;
so fine that we are often on the line and do not know it.

~ Elbert Hubbard (1856 - 1915).


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