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Trading Diary
December 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 .

The Dow Industrial Average closed almost unchanged at 9921, consolidating above the initial support band of 9900/9850 on lower volume.
The intermediate trend is uncertain. Expect support at 9500 and 9600, resistance at 10000.
The primary trend is up. A fall below support at 9000 will signal reversal.


The Nasdaq Composite encountered some buying support above 1880, closing at 1904 on higher volume.
The intermediate trend is uncertain. A fall below 1880 would complete a double top reversal, with a target of 1760: 1880-(2000-1880).
The primary trend is up. A fall below support at 1640 will signal reversal.


The S&P 500 closed 1 point lower at 1059 on average volume. The weak close signals buying support at 1059/1060.
The intermediate trend is uncertain.
Short-term: Bullish if the S&P500 is above 1070. Bearish below 1053 (Today's low).

The primary trend is up. A fall below 960 will signal reversal.
Intermediate: Bullish above 1070.
Long-term: Bullish above 960.


The Chartcraft NYSE Bullish % Indicator fell sharply to 81.30% (December 10).

Treasury yields
The yield on 10-year treasury notes is consolidating, with an inside day closing at 4.31%.
The intermediate trend is down.
The primary trend is up.

New York (22.03): Spot gold retreated to $404.70.
The intermediate trend is up.
The primary trend is up. Expect support at 400, resistance at 415.

ASX Australia
The All Ordinaries closed at the initial 3212 support level on lower volume. 
The intermediate up-trend continues.

MACD (26,12,9) is above its signal line; Slow Stochastic (20,3,3) has crossed to below.
Short-term: Bullish above 3221, today's high. Bearish below 3173 (December 1st low).

XAO is below the long-term trendline, signaling weakness. The primary trend is up but will reverse if there is a fall below 3160 (the October 1 low). Twiggs Money Flow (100) has crossed below its signal line, signaling distribution, following a large bearish triple divergence.
Intermediate term: Bullish above 3221. Bearish below 3160.
Long-term: Bearish below 3160.

Caltex [CTX]
Last covered on September 11, 2003.
Caltex accelerated into a fast intermediate up-trend in April 2003, after an earlier creeping trend. Twiggs Money Flow (100) now displays a strong bearish divergence.

Price and Relative Strength (xao) continue to rise.
Keep stops below the latest short-term trough, but switch to a tighter trailing % stop if the trend accelerates into a blow-off.

Novogen [NRT]
Last covered October 14, 2003.
Novogen provides a good example of a blow-off following an accelerating trend. The trend accelerates at each higher trough on Twiggs Money Flow (100), ending in a blow-off spike.

The up-trend moves into a blow-off, with increased volatility; very short corrections/ consolidations, as at [1] and [3]; and frequent gaps, as at [2] and [4]. There is a strong reversal signal at [5]: a wide-ranging day with a very weak close, below the previous day, and strong volume. This  is followed by a sharp correction back to the longer-term trendline. 
The subsequent attempt at [6] failed to make a new high; a bearish sign. A fall below support at 7.00, accompanied by a similar break of the RS support level, will strengthen the signal, while a fall below the November 13 low will complete a double top reversal.

Equivolume highlights the heavy volume on the correction.

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

Colin Twiggs

Take kindly the counsel of the years,
gracefully surrendering the things of youth.
Nurture strength of spirit to shield you in sudden misfortune.
But do not distress yourself with dark imaginings.
Many fears are born of fatigue and loneliness.

~ Max Ehrmann: Desiderata (1927)

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