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Trading Diary
August 12, 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 1.0% to close at 9310. Continued low volume signals a lack of commitment from buyers.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite rallied 25 points to close at 1687 on higher volume.
The intermediate trend is down.
The primary trend is up.


 


The S&P 500 gained 9 points to close at 990. Low volume continues to signal that the rally is weak.
The intermediate trend is down.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator rallied slightly to 74.48% (August 11).

Market Strategy
Short-term: Long if the S&P500 is above 1000. Short if below 980.
Intermediate: Long if S&P 500 is above 1015. Short if below 980.
Long-term: Long is the index is above 950.


No change
The Fed left overnight lending rates at 1.0%, saying that it expects economic growth to improve but is concerned by an "unwelcome fall" in already-low inflation. (more)

Treasury yields
The yield on 10-year treasury notes closed almost unchanged at 4.36%.
The intermediate and primary trends are both up.



Gold
New York (17.18): Spot gold eased to $357.60.
The primary trend is still upwards.



ASX Australia
The All Ordinaries lost 2 points, retreating to 3135 on strong volume. The gravestone candles signal trend weakness.
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 3149. Short if the intermediate trend turns down.
Intermediate: Long if the index is above 3149. 
Long-term: Long if the index is above 2978 .

Gold stocks
Three gold stocks are making new 3-month highs:

Oxiana Resources [OXR]
Last covered on July 29, 2003.
Oxiana has broken out from an ascending triangle and has rallied to new highs on strong volume.
Twiggs Money Flow (100) and Relative Strength are bullish.



Newcrest [NCM]
Last covered on July 29, 2003.
NCM has also broken through resistance to new highs.
Relative Strength and MACD are bullish but Twiggs Money Flow displays a bearish divergence over the past two months.
Lower volume in the last week warns of a possible pull-back to test support levels.



Croesus [CRS]
Last covered on February 7, 2003; a good example of why tight stop losses are essential - not every trade goes according to plan.
CRS has since broken above the long-term downward trendline after forming a narrow bottom. 
MACD and Twiggs Money Flow (100) are bullish.



Price continues to rally, while Relative Strength is bullish.



The wide ranging day, accompanied by strong volume, on the breakout above the downward trendline [1] is a bull signal. This is reinforced by the dry up of volume on the pull-back at [2].
Low volume and weak closes signal a loss of momentum at [3]. But the correction to [4] continued with low volume.
CRS then formed a higher low before rallying above the high of [3] on stronger volume.



The narrow bottom may end in a retreat at some point to re-test support levels, but short-term traders may still find entry opportunities on corrections, while the upward trend persists.
A change in the intermediate trend would be bearish.





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

Colin Twiggs


Laws Conditional # 7.

I have written to little purpose unless I have left the impression
that the fundamental principle that lies at the base of all speculation is this:
Act so as to keep the mind clear, its judgment trustworthy.

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



 
Tip: Coppock Indicator
The long-term, monthly Coppock indicator is also available in a pre-set file: 

Select File>>Open Project>>[Coppock Indicator 14_11_10 Months].
The file also includes a daily version of the same indicator.



Back Issues
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Back Issues
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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.