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Trading Diary
July 29, 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 .

The Dow retreated to close 0.7% lower at 9204 on higher volume.
The intermediate trend is up. A decline below 9000 will signal a down-turn.
The primary trend is up.

The S&P 500 lost 8 points to close at 989 on higher volume.
The intermediate trend is up. A fall below 976 will signal a down-turn.
The primary trend is up.


The Nasdaq Composite closed 4 points lower at 1731 on higher volume.
The intermediate trend is up.
The primary trend is up.

The Chartcraft NYSE Bullish % Indicator rallied to 76.07% on July 28.

Market Strategy
Short-term: Long if the S&P 500 is above 1000. Short if the index falls below 976.
Intermediate: Long if the S&P is above 1015. Short if below 962.
Long-term: Long if above 962.

Consumer confidence falls
The Conference Board consumer confidence index surprised forecasters with a drop to 76.6 from 83.5 in June.

Treasury yields
CBOE: The yield on 10-year notes has jumped to 4.40%.
The intermediate trend is up; the primary trend has reversed upwards.
New York (19.21): Spot gold eased to $US 361.20.
On the five-year chart, gold is above the long-term upward trendline.

ASX Australia
The All Ordinaries hesitated after the breakout above 3089, forming an inside day with a low close at 3093 on higher volume.
The intermediate trend is up. A break below support at 3089 would be bearish.
The primary trend is up.

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

Market Strategy
Short-term: Long if the All Ords is above 3089. Go short if below 2978.
Intermediate: The primary trend is up; Long if the All Ords is above 3089. Short if below 2978.
Long-term: Long if the index is above 2978.

Last covered on November 13, 2002.
A sector chart of major gold stocks shows several making new 3-month highs: Oxiana [OXR] is the star performer, with Newcrest [NCM] and Sons Of Gwalia [SGW] rising at a gentler pace. Lihir [LHG] and Kingsgate [KCN] appear close to new 3-month highs as well.

St George Bank [SGB]
Last covered on June 26, 2003.
SGB displays rising relative strength (price ratio: xao) over the past 3 years. Price recently made a new high but has since pulled back to test support at the previous high point.

Twiggs Money Flow (100) has signaled strong accumulation for the past 18 months. The shorter-term 21-day indicator has returned to the zero line with the latest pull-back.

Price has consolidated between support at 20.50 and resistance at 21.20 after double tops at [1] and [3].

MACD appears set to make a bullish up-turn just below the zero line (the lines have not yet crossed so this is not yet a valid signal).

The equivolume chart highlights the dry up of volume on the second high at [3] and a further dry-up on the next rally at [4]. Support is evident at 21.20 with heavy volume at [2] and [5]. Support is then overcome with a fall to [6] and price now encounters resistance at the former support level with heavy volume at [7] and weak closes at [7] and [8].

Bullish signs to watch for are a dry-up of volume (and volatility) on downward days; weak closes on downward days, as at [9]; and large volume on up days with strong closes (near to the days high). A break above resistance at 21.20, on strong volume, will be a bull signal for longer-term traders.

A close below support at 20.50 would be a strong bear signal.

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

Colin Twiggs

Laws Absolute #3

Another rule is, when doubtful reduce the amount of the interest;
for either the mind is not satisfied with the position taken, or the interest is too large for safety.
One man told another that he could not sleep on account of his position in the market;
his friend judiciously and laconically replied: "Sell down to a sleeping point".

~ S.A. Nelson: The ABC of Stock Speculation (1903).

Stock Screens: Trend Reversals

Directional movement is also used to identify trend reversals:

(1) Select ASX 200 from Indices and Watchlists and 200 as the Maximum Return;
(2) Open Directional Movement;
(3) Select ADX Reversals: ADX (14) turns up 4 points within the last 5 trading days; 
(4) Submit.

This will return intermediate trend reversals.

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