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Trading Diary
October 6, 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 formed an inside day on low volume,
signaling continuation. The index closed slightly up at
9595.
The intermediate trend is down. A rise above 9686 will signal reversal.
The primary trend is up. A fall below 9000 will signal reversal.
The intermediate trend is down. A rise above 9686 will signal reversal.
The primary trend is up. A fall below 9000 will signal reversal.
The Nasdaq Composite closed 12 points higher at 1893 on lower
volume.
The intermediate trend is down. A rise above 1914 will signal reversal.
The primary trend is up. A fall below 1640 will signal reversal.
The intermediate trend is down. A rise above 1914 will signal reversal.
The primary trend is up. A fall below 1640 will signal reversal.
The S&P 500 formed an inside day on low volume, signaling
continuation. The index closed up 4 points at 1034.
The intermediate trend is weak. A rise above 1040 will signal resumption of the up-trend.
The primary trend is up. A fall below 960 will signal reversal.
The intermediate trend is weak. A rise above 1040 will signal resumption of the up-trend.
The primary trend is up. A fall below 960 will signal reversal.
The Chartcraft NYSE Bullish % Indicator rose to
79.74% (October 6).
Market Strategy
Short-term: Bullish if the S&P500 is above 1040. Bearish below 1029.
Intermediate: Bullish above 1040.
Long-term: Bullish above 960.
Short-term: Bullish if the S&P500 is above 1040. Bearish below 1029.
Intermediate: Bullish above 1040.
Long-term: Bullish above 960.
The Fed's next step: will they raise interest rates?
Most Fed-watchers say that it is too soon, and that the Fed will wait for further evidence of recovery before acting. (more)
Most Fed-watchers say that it is too soon, and that the Fed will wait for further evidence of recovery before acting. (more)
Treasury yields
The yield on 10-year treasury notes consolidated at 4.15%, after a sharp jump to 4.20%.
The intermediate down-trend appears weak.
The primary trend is up.
The yield on 10-year treasury notes consolidated at 4.15%, after a sharp jump to 4.20%.
The intermediate down-trend appears weak.
The primary trend is up.
Gold
New York (17:32): Spot gold has leveled out at $372.50.
The intermediate trend has turned down.
The primary trend is up. A fall below 350 will signal reversal.
The target for the symmetrical triangle is calculated as 426 (365 + 382 - 321), but expect heavy resistance between 400 and 415 (the 10-year high).
New York (17:32): Spot gold has leveled out at $372.50.
The intermediate trend has turned down.
The primary trend is up. A fall below 350 will signal reversal.
The target for the symmetrical triangle is calculated as 426 (365 + 382 - 321), but expect heavy resistance between 400 and 415 (the 10-year high).
ASX Australia
The All Ordinaries rallied, closing up 17 points at 3223 on low
volume.
The intermediate down-trend is weak. The next resistance level is
at 3250; support is at 3160.
The primary trend is up. A fall below 3000 will signal reversal.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow signals distribution.
The primary trend is up. A fall below 3000 will signal reversal.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow signals distribution.
Market Strategy
Short-term: Bullish if the All Ords is above 3209. Bearish below 3200.
Intermediate: Bullish above 3250.
Long-term: Bullish above 3000.
Short-term: Bullish if the All Ords is above 3209. Bearish below 3200.
Intermediate: Bullish above 3250.
Long-term: Bullish above 3000.
Timbercorp [TIM]
Last covered July 14, 2003.
TIM enjoyed a strong rally, with 3 fairly weak corrections at [a], [b] and [c], before a top formed at [e].
Twiggs Money Flow has crossed back above its signal line.
Last covered July 14, 2003.
TIM enjoyed a strong rally, with 3 fairly weak corrections at [a], [b] and [c], before a top formed at [e].
Twiggs Money Flow has crossed back above its signal line.
Relative Strength (price ratio: xao) is declining.
The double top at [d] and [e] is an intermediate bear signal.
The double top at [d] and [e] is an intermediate bear signal.
The equivolume chart shows that the two highs are not exactly
equal: [d] signals strong selling pressure with a square bar; [e]
displays less volume but still closes weakly. The lower high [4]
and subsequent lower low signals that the intermediate trend has
turned down. Price ended a two-thrust counter-trend at [5], with
strong buying support signaled by heavy volume and a weak close.
A weak rally followed, encountering resistance at [6].
A break above 1.40 on strong volume will signal a re-test of
resistance at 1.60. Watch out for a primary double top pattern,
if TIM forms another equal high.
A fall below 1.18 will be a strong bear signal.
A fall below 1.18 will be a strong bear signal.
Mincor [MCR]
Mincor appears to be headed for a sharp blow-off reversal.
Twiggs Money Flow (100) is rising rapidly after an earlier fall.
Mincor appears to be headed for a sharp blow-off reversal.
Twiggs Money Flow (100) is rising rapidly after an earlier fall.
Relative Strength (price ratio: xao) reflects the same
accelerating up-trend.
The daily volume chart shows clear signs of acceleration:
- Counter-trends are shorter, with a one day reversal at [4], after 4-day counter-trends at [1], [2] and [3];
- The gap between the low of each reversal and the previous high is increasing - one of Bill McLaren's strongest signals;
- Volume and volatility are increasing on each breakout above the previous high.
Continued volatility, gaps and high volumes may signal a good
time to lock in profits with a
trailing % stop.
Understanding
the Trading Diary has been expanded to offer further
assistance to readers, including
directions on how to search the archives.
Colin Twiggs
We are group animals still, and there is nothing
wrong with that.
But what is dangerous is not the belonging to a group, or groups,
but not understanding the social laws that govern groups and govern us.
When we're in a group, we tend to think as that group does:
we may even have joined the group to find 'like-minded' people.
But we also find our thinking changing because we belong to a group.
It is the hardest thing in the world to maintain an individual dissident opinion,
as a member of a group.
~ Doris Lessing: Prisons We Choose To Live Inside (1994).
But what is dangerous is not the belonging to a group, or groups,
but not understanding the social laws that govern groups and govern us.
When we're in a group, we tend to think as that group does:
we may even have joined the group to find 'like-minded' people.
But we also find our thinking changing because we belong to a group.
It is the hardest thing in the world to maintain an individual dissident opinion,
as a member of a group.
~ Doris Lessing: Prisons We Choose To Live Inside (1994).
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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.