US stocks

Our target is to have NYSE, Nasdaq and Amex charts available by Friday. 

Trading Diary
November 4, 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 .

The Dow Industrial Average formed an inside day, closing down at 9839. Low volume signals an absence of selling pressure. 
The intermediate trend is up.
The primary trend is up. A fall below 9000 will signal reversal.

The Nasdaq Composite retreated 10 points to close at 1958. Strong volume signals selling pressure.
The intermediate trend is up.
The primary trend is up. A fall below 1640 will signal reversal. Expect resistance at 2000.


The S&P 500 formed an inside day, closing 6 points lower at 1053 on average volume. 
The intermediate trend is up.
The primary trend is up. A fall below 960 will signal reversal.

The Chartcraft NYSE Bullish % Indicator closed lower at 81.25% (November 4).

Market Strategy
Short-term: Bullish if the S&P500 is above 1059.
Intermediate: Bullish above 1059.
Long-term: Bullish above 960.

More job cuts
The highest level of job cut announcements was recorded since October 2002. Unemployment is still high and many human resource managers do not see a pick-up in hiring until the second quarter of 2004. (more)

Treasury yields
The yield on 10-year treasury notes retreated to 4.30%.
The intermediate down-trend is weak.
The primary trend is up.

New York (17.44): Spot gold recovered to $379.90.
The intermediate trend is up. Price has formed equal highs in the past 6 weeks; a fall below 370.00 will be a bear signal.
The primary trend is up. Expect resistance at 400 to 415.

ASX Australia
The All Ordinaries closed 11 points up at 3280. The weak close on higher volume signals selling pressure.

The intermediate up-trend is weak. A fall below 3250 will signal reversal.
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 below; 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 3296. Bearish below 3250.
Intermediate: Bullish above 3296.
Long-term: Bullish above 3160.

Information Technology
A stock screen of sector indices reveals that IT has out-performed all other sectors of the ASX by a substantial margin over the past 3 months:

Sector Index %Move(3M)
Information Technology [XIJ]
Materials [XMJ]
Consumer Discretionary [XDJ]
Health Care [XHJ]
Industrials [XNJ]
Energy [XEJ]
Telecom Services [XTJ]
Financial-x-Property [XXJ]
Consumer Staples [XSJ]
Utilities [XUJ]
Property Trusts [XPJ]

ERG Limited [ERG]
Last covered on October 28, 2003.
ERG has broken out of a broad base and is testing resistance at 1.50 to 1.80. Twiggs Money Flow (100) has climbed above zero to signal accumulation, after a long period of distribution.

Relative Strength (xao) is rising. It is important that RS respects the support line on the next pull-back.

Equivolume is bullish, with a wide gap between the previous high of [1] and the current low of [3]. Note the dry up of volume and volatility at [3] presenting an entry opportunity (entries are taken with a buy-stop above the high and a stop-loss below the low). This pattern may be repeated before there is a break above resistance at 1.50. A rise above the high of [2] will add further confirmation.

Vision Systems [VSL]
Last covered on September 1, 2003.
Vision is consolidating after rising off equal lows (July 03 and October 02). The pattern resembles a symmetrical triangle.  Twiggs Money Flow (100) signals accumulation.

Relative Strength (price ratio: xao) is declining and a fall through the current support level will be bearish.

Volume has dried up considerably during the consolidation, which is not unexpected. We will have to wait for a rise above 1.20 or below 1.06 to provide further clues. 

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

Colin Twiggs

Fame or your health - which is more dear?
Your health or possessions - which is worth more?
Gain or loss - in which is there harm?

~ Lao Tse (c. 300 B.C.)

Log scale
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The log scale can be selected on the toolbar and is useful for presenting charts with a long time period or large price fluctuation. 

You may notice that trendlines drawn on a log chart will not display if you switch to normal scale; they would be meaningless. I prefer to draw trendlines on a normal scale.

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