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Trading Diary
October 10, 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 is having difficulty breaking through resistance, forming an inside day with a close at 9675 on lower volume.
The intermediate trend is uncertain. A rise above 9686 will signal an up-trend.
The primary trend is up. A fall below 9000 will signal reversal.



The Nasdaq Composite formed a similar inside day on lower volume, closing at 1915.
The intermediate trend uncertain. The rise above 1914 is unconvincing.
The primary trend is up. A fall below 1640 will signal reversal.


 


The S&P 500 formed another inside day, closing down 1 point at 1038 on low volume.
The intermediate trend is uncertain. 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 is up at 80.90% (October 10).

Market Strategy
Short-term: Bullish if the S&P500 is above 1040. Bearish below 1026.
Intermediate: Bullish above 1040.
Long-term: Bullish above 960.


GE slips
General Electric lowers earnings expectations for the third time - a sign that all is not right with the US economy. (more)

Treasury yields
The yield on 10-year treasury notes ended the week at 4.25%, after testing support at 4.00%.
The intermediate down-trend appears weak. 
The primary trend is up.





Gold
New York (13.30): Spot gold recovered slightly to $373.20.
The intermediate trend has turned down.
The primary trend is up. Support is at 343 to 350.




ASX Australia
The All Ordinaries broke through resistance at 3250 to close at 3266 on lower volume.



The intermediate trend has turned up.
The primary trend is up. A fall below 3000 will signal reversal.  

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (100) displays a bearish divergence.



Market Strategy
Short-term: Bullish if the All Ords is above 3250.
Intermediate: Bullish above 3250.
Long-term: Bullish above 3000.

Sector Analysis
Changes are highlighted in bold.
  • Energy [XEJ] - stage 2 (RS is rising).
  • Materials [XMJ] - stage 2 (RS is rising)
  • Industrials [XNJ] - stage 2 (RS is level). An unstable V-bottom.
  • 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 [XXJ] - stage 2 (RS is level) 
  • Information Technology [XIJ] - stage 2 (RS is rising)
  • Telecom Services [XTJ] - stage 2 (RS is rising).
  • Utilities [XUJ] - stage 3 (RS is falling)

Industrials [XNJ] rose above the previous high to signal the start of stage 2. The V-bottom has a higher risk of failure, reverting to stage 1 with a re-test of previous lows.



Property Trusts [XPJ] continue with a stage 3 top. A break below 1400 will signal the onset of stage 4.



Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) rose to 58 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
  • Oil & Gas Exploration & Production (5)
  • Diversified Metals & Mining (4)
  • Broadcasting & Cable TV (4)
  • Gold (3)
  • Casinos & Gaming (3)
  • Publishing (3)

Daily Trading Diary
Stocks analyzed during the week were:
  • Timbercorp - TIM
  • Mincor - MCR
  • Telstra - TLS
  • CSL Limited - CSL
  • Mosaic Oil - MOS
  • Patrick - PRK
  • Peptech - PTD
  • Australian Growth Properties - AGH
  • OAMPS Limited - OMP
  • Orbital Engine - OEC





Understanding the Trading Diary has been expanded to offer further assistance to readers, including directions on how to search the archives.

Colin Twiggs


To eliminate the emotional risk of trading
you have neutralize your expectations about what the market will or will not do
at any given moment or in any given situation.....(think in terms of probabilities).

~ Mark Douglas: Trading in the Zone.



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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.