Trading Diary
November 20, 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 closed just above yesterday's low, at 9619. Low volume signals an absence of buyers. 
The intermediate trend is down.
The primary trend is up. A fall below 9000 will signal reversal.



After an early rally the Nasdaq Composite fell to 1882, down 18 points on average volume. The index remains below the primary trendline.
The intermediate trend is down. Expect support at 1840 and 1780, the previous two lows.
The primary trend is up. A fall below 1640 will signal reversal.


 


The S&P 500 closed 8 points lower at 1034 on average volume. 
The intermediate trend is down. Expect support at the primary trendline.
Short-term: Bullish if the S&P500 is above 1062, the high of the November 7th. Bearish below 1034 (Wednesday's low).


The primary trend is up. A fall below 960 will signal reversal.
Twiggs Money Flow (100) signals distribution.
Intermediate: Bullish above 1062.
Long-term: Bullish above 960.

The Chartcraft NYSE Bullish % Indicator fell to 79.93% (November 20).


Istanbul
Powerful explosions damaged the British Consulate and HSBC Bank in Istanbul, killing 27, including the British Consul General, and injuring more than 450. (more)

Jobless claims fall
355,000 new unemployment claims were filed last week, below the 370,000 from the week before. (more)

Treasury yields
No false break, the yield on 10-year treasury notes closed back down at 4.15%. 
The intermediate trend is down.
The primary trend is up.





Gold
New York (19:24): Spot gold retreated to $394.40.
The intermediate trend is up.
The primary trend is up. Expect resistance at 400 to 415.




ASX Australia
The All Ordinaries gained another 4 points to close at 3193. The long upper shadow and lower volume signal a lack of commitment from buyers.



A reader asked: "What are the two lines that you draw on the volume chart?"

This is an idea from Bill McLaren. Draw the lines to incorporate about 80% of volume readings. Volume above the higher line signals unusually strong volume. Volume below the lower line signals unusually low volume. Both are important signals.

The intermediate trend is down.
MACD (26,12,9) is below its signal line; Slow Stochastic (20,3,3) has whipsawed above.
Short-term: Bullish if the All Ords crosses back above resistance at 3250. Bearish below Thursday's low of 3189.

The primary trend is up, but will reverse if there is a fall below 3160 (the October 1 low). The index is below its supporting trendline, signaling weakness. Twiggs Money Flow (100) signals strong distribution after a bearish triple divergence.
Intermediate term: Bullish above 3250. Bearish below 3160.
Long-term: Bearish below 3160.

Hardman Resources [HDR]
Last covered on July 21, 2003.
HDR consolidated between 0.64 and 0.72 after an inverted head and shoulders reversal. Price broke through resistance last week, accompanied by rising Relative Strength (xao).



However, Twiggs Money Flow displays a bearish divergence, warning us to be cautious.



Equivolume displays daily volume by the width of the bar. Thin bars signal that volume dried up on the three down-swings during the consolidation; a bullish sign. But the breakout encountered heavy resistance, with square bars and weak closes (long upper shadows). 



A fall below support at 0.72/0.70 would be bearish, while a fall below 0.64/0.63 will be a strong bear signal.
A pull-back that respects support at 0.72 will be bullish, but I will wait for a more positive signal from Twiggs Money Flow.






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

Colin Twiggs


T.S. Eliot once wrote “Only those who risk going too far can possibly find out how far one can go.” 
It seems that the U.S. financial system is bound and determined to find out.

~ John P Hussman: Freight Trains and Steep Curves (July 11, 2003).



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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.