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Trading Diary
August 1, 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 0.9% on Friday to close at 9154 on lower volume.
The intermediate trend is up. The index has formed a bullish ascending triangle with resistance at 9360.
The primary trend is up.



The S&P 500 closed down 10 points at 980 on lower volume.
The intermediate trend is up. The index appears to be consolidating after the breakout above 950. A fall below 976 will signal an intermediate down-trend.
The primary trend is up.



The Nasdaq Composite lost 1.1% to close at 1716 on lower volume.
The intermediate trend is up. The index has formed a bearish lower high at [b]; a break below support at 1679 will signal a down-trend.
The primary trend is up.


 


The Chartcraft NYSE Bullish % Indicator has fallen back to 75.39% (August 1), a similar level to last week.

Market Strategy
Short-term: Long if the S&P500 is above 990. Short if below 976.
Intermediate: Long if S&P 500 is above 1015. Short if below 950.
Long-term: Long is the index is above 950.


Further job cuts
Employers surprised the market, cutting 44,000 jobs in July. (more)
 
Manufacturing gains
The Institute for Supply Management manufacturing index rose to 51.8, signaling expansion. (more)

Treasury yields
The yield on 10-year treasury notes closed at 4.42%.
The intermediate and primary trends are both up.



Gold
New York (13.30): Spot gold fell sharply at the close, finishing the week at $346.20.
The primary trend is still upwards.



ASX Australia
The All Ordinaries presents a stronger picture, gaining 19 points to close at 3126 on Friday. Lower volume signals a lack of commitment from buyers and we may witness a retreat after the week closes in the US market.
The intermediate trend is up. A fall below 2978 would signal a reversal.
The primary trend is up.

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




Market Strategy
Short-term: Long if the All Ords is above 3103. Short if the index falls below 2978.
Intermediate: Long if the index is above 3103.
Long-term: Long if the index is above 2978 .

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


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) is strong at 93 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Diversified Metals & Mining (7)
  • Oil & Gas Exploration & Production (7)
  • Gold (5)
  • Construction Materials (4)
  • Diversified Commercial Services (4)
  • REITs (4)
  • Diversified Financial Services (3)
  • Steel (3)
  • Auto Parts & Equipment (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Wesfarmers - WES
  • Gold stocks
  • St George - SGB
  • Burns Philp - BPC
  • Adelaide Brighton - ABC
  • Austal - ASB
  • Henry Walker Eltin - HWE
  • Smorgon Steel - SSX
  • Jubilee Mines - JBM
  • Caltex - CTX





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

Colin Twiggs


If you believe you can do a thing or if you believe you cannot - you are right.

~ Henry Ford.



 
Stock Screens: MACD

We have seen numerous examples of bullish MACD troughs above zero in the last few months:

(1) Select ASX 200 from Indices and Watchlists and 200 as the Maximum Return;
(2) Open MACD;
(3) Select MACD (26,12,9): Bull signal within the last 3 days;
(4) Select MACD (26,12,9) above/below zero: Bull signal within the last 9999 days;
(5) Submit;
(6) Sort the Return by clicking on the MACD (26,12,9,0) header.

Higher values will reflect stocks that have completed a bullish MACD trough above zero.




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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.