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Trading Diary
September 5, 2003

These extracts from my daily trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use .




USA
The Dow Industrial Average retreated 0.9% to close at 9503, starting a short-term correction on low volume.
The intermediate trend is up.
The primary trend is up.



The Nasdaq Composite lost 11 points on Friday, closing at 1858 on higher volume, signaling uncertainty with a doji.
The intermediate trend is up.
The primary trend is up.


 


The S&P 500 closed 7 points lower at 1021 on average volume. The index is likely to test support at 1010 to 1015.
The intermediate trend is up.
The primary trend is up.



The Chartcraft NYSE Bullish % Indicator is at a 10-year high of 79.62% (September 5).

Market Strategy
Short-term: Long if the S&P500 is above 1029.
Intermediate: Long if S&P 500 is above 1015.
Long-term: Long is the index is above 960.


Shrinking payrolls
The Labor Department announces an unexpected net loss of 93,000 non-farm jobs in August, compared to a loss of 49,000 in July . (more)

Treasury yields
The yield on 10-year treasury notes is down slightly from last week at 4.35% and we are likely to see a test of support at 4.20% to 4.26%.
The intermediate and primary trends are both up.





Gold
New York (13.30): Spot gold closed the week up slightly at $377.00.
The primary trend is up.
Price has broken above a symmetrical triangle formed since the start of the year. If gold rises above overhead resistance at 382, the target is the 10-year high of 420. The calculated target is 426 (365 + 382 - 321).




ASX Australia
The All Ordinaries closed down 14 points on Friday at 3220; up 17 points on the week. Heavy volume and short corrections signal an accelerating trend. Bear in mind that the steeper the trend, the more likely we are to encounter a sharp correction.



The weekly chart shows intermediate and primary up-trends. 

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is below; 
Twiggs Money Flow displays a bearish divergence.



Market Strategy
Short-term: Long above 3234.
Intermediate: Long if the index is above 3160.
Long-term: Long if the index is above 2978 .

Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 2 (RS is rising).
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 1 (RS is level)
  • Consumer Discretionary [XDJ] - stage 2 (RS is rising)
  • Consumer Staples [XSJ] - stage 1 (RS is falling)
  • Health Care [XHJ] - stage 2 (RS is rising)
  • Property Trusts [XPJ] - stage 3 (RS is falling)
  • Financial excl. Property Trusts [XXJ] - stage 2 (RS is falling). 
  • Information Technology [XIJ] - stage 2 (RS is rising)
  • Telecom Services [XTJ] - stage 2 (RS is level).
  • Utilities [XUJ] - stage 2 (RS is falling)


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) is steady at 71 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Diversified Metals & Mining (5)
  • Gold (5)
  • Diversified Commercial (3)
  • Construction & Engineering (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Autron - AAT
  • ERG Limited - ERG
  • HPAL Limited - HPX
  • Infomedia - IFM
  • KAZ Group - KAZ
  • SMS Limited- SMX
  • Solution 6 - SOH
  • Technology One - TNE
  • Vision - VSL
  • Financial sector - XXJ
  • Property sector - XPJ
  • Australian Pipeline Trust - APA
  • Energy Developments - ENE
  • Envestra - ENV
  • Gasnet - GAS
  • Pacific Hydro - PHY
  • Alinta Gas - ALN
  • Australian Gas Light - AGL





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

Colin Twiggs


It is optimism that is the enemy of the rational buyer.

~ Warren Buffet.



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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.