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Trading Diary
October 31, 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 reflects selling pressure at the 9813
to 9850 band of resistance, closing at 9801 on low
volume.
The intermediate trend is down.
The primary trend is up. A fall below 9000 will signal reversal.
The intermediate trend is down.
The primary trend is up. A fall below 9000 will signal reversal.
The Nasdaq Composite closed 1 point lower at 1932 on lower
volume.
The intermediate down- trend is weak.
The primary trend is up. A fall below 1640 will signal reversal.
The intermediate down- trend is weak.
The primary trend is up. A fall below 1640 will signal reversal.
The S&P 500 also encountered resistance at 1050 to 1054,
closing 4 points up at 1051 on lower volume.
The intermediate down- trend is weak.
The primary trend is up. A fall below 960 will signal reversal.
The intermediate down- trend is weak.
The primary trend is up. A fall below 960 will signal reversal.
The Chartcraft NYSE Bullish % Indicator is almost
unchanged at 80.83% (October 31).
Market Strategy
Short-term: Bullish if the S&P500 is above 1054. Bearish below 1026.
Intermediate: Bullish above 1054.
Long-term: Bullish above 960.
Short-term: Bullish if the S&P500 is above 1054. Bearish below 1026.
Intermediate: Bullish above 1054.
Long-term: Bullish above 960.
Consumer Spending
Consumer spending fell 0.3% in September after rising 1.1% in August. (more)
Like GDP growth, this is a lagging rather than a leading indicator and is most likely already discounted in current market prices.
Consumer spending fell 0.3% in September after rising 1.1% in August. (more)
Like GDP growth, this is a lagging rather than a leading indicator and is most likely already discounted in current market prices.
Treasury yields
The yield on 10-year treasury notes increased to 4.30%.
The intermediate down-trend is weak.
The primary trend is up.
The yield on 10-year treasury notes increased to 4.30%.
The intermediate down-trend is weak.
The primary trend is up.
The yield
curve is healthy, with a
yield differential of more than 3.0% compared to short-term
T-bills.
Gold
New York (13.30): Spot gold is up at $384.10.
The intermediate trend is up.
The primary trend is up. Expect resistance at 400 to 415.
New York (13.30): Spot gold is up at $384.10.
The intermediate trend is up.
The primary trend is up. Expect resistance at 400 to 415.
ASX Australia
Selling pressure overcame buyers, driving the All Ordinaries 3
points lower to 3282 on strong volume.
The intermediate up-trend is weak.
The primary trend is up. The rally is extended and probability of a reversal increases with each successive primary trend movement.
A fall below 3160 will signal reversal.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (100) is below its signal line and displays a bearish "triple" divergence.
The primary trend is up. The rally is extended and probability of a reversal increases with each successive primary trend movement.
A fall below 3160 will signal reversal.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) is above; Twiggs Money Flow (100) is below its signal line and displays a bearish "triple" divergence.
Market Strategy
Short-term: Bullish if the All Ords is above 3317. Bearish below 3250.
Intermediate: Bullish above 3317.
Long-term: Bullish above 3160.
Short-term: Bullish if the All Ords is above 3317. Bearish below 3250.
Intermediate: Bullish above 3317.
Long-term: Bullish above 3160.
Sector Analysis
Materials, Consumer Discretionary and Information Technology are the most promising, with rising Relative Strength (xjo).
Materials, Consumer Discretionary and Information Technology are the most promising, with rising Relative Strength (xjo).
- Energy [XEJ] - stage 2 (RS is level).
- Materials [XMJ] - stage 2 (RS is rising)
- Industrials [XNJ] - stage 2 (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 level)
- Property Trusts [XPJ] - stage 3 (RS is falling)
- Financial excl. Property [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 3 (RS is falling)
The Financials-X-Property index [XXJ] is consolidating. Relative
Strength (xjo) continues to weaken and a fall to a new 1 year low
will be a strong bear signal.
Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) rose to 73 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
A stock screen of the ASX 200 using % Price Move (1 month: +5%) rose to 73 stocks (compared to 131 on April 11, 2003; and 8 on March 14, 2003).
- Diversified Metals & Mining (6)
- Broadcasting & Cable TV (5)
- Publishing (4)
- Gold (4)
Diversified Financial (4) - Construction & Engineering (3)
- Movies & Entertainment (3)
- Casinos & Gaming (3)
- Diversified Commercial (3)
Daily Trading Diary
Stocks analyzed during the week were:
Stocks analyzed during the week were:
- St George Bank - SGB
- Westpac - WBC
- Resmed - RMD
- ERG Limited - ERG
- Smorgon Steel - SSX
- Onesteel - OST
- BHP Steel - BSL
- Ventacor - VCR
Understanding
the Trading Diary has been expanded to offer further
assistance to readers, including
directions on how to search the archives.
Colin Twiggs
The average speculator buys stocks when they are
'strong' and sells them when they are 'weak'.
This is a common principle with them and shows fallacious reasoning.
In stock fluctuations, prices advance and decline, or vice versa, as it is a bull or a bear market.
Therefore when a stock is 'strongest', to the superficial eye, it is really 'weakest',
for then it can be sold for a reaction, just as it is sold by the so-called insiders.
~ SA Nelson: The ABC of Stock Speculation (1903).
This is a common principle with them and shows fallacious reasoning.
In stock fluctuations, prices advance and decline, or vice versa, as it is a bull or a bear market.
Therefore when a stock is 'strongest', to the superficial eye, it is really 'weakest',
for then it can be sold for a reaction, just as it is sold by the so-called insiders.
~ SA Nelson: The ABC of Stock Speculation (1903).
Premium members can now chart ETOs and Warrants.
but the data feed is still beta at this stage.
but the data feed is still beta at this stage.
Back Issues
You can now view back issues at the Daily Trading Diary Archives.
You can now view back issues at the Daily Trading Diary Archives.
Back Issues
Access the Trading Diary Archives.
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.