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Trading Diary
August 8, 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 to 9191 on lower volume, consolidating above the 9000 support level.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite closed down at 1644 on low volume.
The intermediate trend is down.
The primary trend is up.


 


The S&P 500 rallied 4 points to close at 978. Low volume signals a lack of commitment from buyers.
The intermediate trend is down.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator has fallen to 74.35% (August 1), down 1.0% on last week.

Market Strategy
Short-term: Long if the S&P500 is above 1000. Short if below 974.
Intermediate: Long if S&P 500 is above 1015. Short if below 974.
Long-term: Long is the index is above 950.


No rate cut expected
Rising long-term rates may hamper the recovery, but the Fed is unlikely to cut short-term interest rates at its' Tuesday meeting. (more)

Treasury yields
The yield on 10-year treasury notes closed at 4.29%, easing slightly from last week's high.
The intermediate and primary trends are both up.



Gold
New York (13.30): Spot gold closed up $10.00 for the week, at $356.20.
The primary trend is still upwards.



ASX Australia
The All Ordinaries gained 11 points on Friday to close at 3136. Lower volume signals a lack of commitment.
The intermediate trend is up. A fall below 2978 would signal a reversal.
The primary trend is up.

Slow Stochastic (20,3,3) is below 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 3127. Short if the index falls below 2978.
Intermediate: Long if the index is above 3127.
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 level)
  • 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%) eased to 84 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Diversified Metals & Mining (7)
  • Oil & Gas Exploration & Production (7)
  • Gold (6)
  • Health Care Facilities (4)
  • Construction Materials (4)
  • Diversified Commercial Services (3)
  • Real Estate Management & Development (3)
  • Diversified Financial Services (3)
  • Steel (3)
  • Auto Parts & Equipment (3)
  • Broadcasting & Cable TV (3)
  • Construction & Engineering (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Centennial Coal - CEY
  • Computershare - CPU
  • Telecom NZ - TEL
  • Telstra - TLS
  • Healthscope - HSP
  • Ramsay Health Care - RHC
  • DCA Group - DVC
  • Sigma - SIG
  • Amity Oil - AYO
  • Caltex - CTX
  • Oil Search - OSH





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

Colin Twiggs


Laws Conditional # 6.

In forming an opinion of the market the element of chance ought not to be omitted.
There is a doctrine of chances - Napoleon in his campaign, allowed a margin for chances
 - for the accidents that come in to destroy or modify the best calculation.
 Calculation must measure the incalculable.
 In the "reproof of chance lies the true proof of men."

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



 
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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.