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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 has consolidated over the last 2 days, closing at 10488. Low volume with a "hammer" close signals an absence of selling pressure. 
A fall below Thursday's low of 10417 would signal a re-test of support at 10000.

Despite the down-turn, Twiggs Money Flow (100) continues to signal accumulation. 
The primary trend is up. A fall below support at 9600 would signal reversal.

The Nasdaq Composite consolidated after the recent down-thrust, closing at 2066. Thursday's weak close and big volume signaled buying pressure, but Friday's inside day on lower volume increases the chances of a continuation. 
The intermediate trend is uncertain. Initial support is at 2000, resistance at 2300.
The primary trend is up. A fall below support at 1640 will signal reversal.

 

The S&P 500 consolidated with an inside day after a 2-day correction, closing at 1131. Strong volume and a narrow range signal pressure from both buyers and sellers.
The intermediate trend is up, with resistance overhead at 1175.
Short-term: Bullish if the S&P500 is above 1155.

The primary trend is up. A fall below 960 would signal reversal.
Twiggs Money Flow (100) may have turned down but continues to signal accumulation.
Intermediate: Bullish above 1155.
Long-term: Bullish above 1000.

The Chartcraft NYSE Bullish % Indicator retreated to 84.59%. More than 80% of NYSE stocks are in an up-trend, the highest level in 10 years.

Treasury yields
The yield on 10-year treasury notes retraced to 4.138%.
The intermediate trend is up and likely to re-test resistance levels at 4.4% to 4.5%.
The primary trend is up. A close below the September low of 3.93% would signal reversal.

The yield differential (10-year T-notes compared to 13-week T-bills) is a healthy 3.25%.

 

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ASX Australia

The All Ordinaries attempted a rally after the fast 3-day down-trend, but selling pressure forced a weak close at 3283 on strong volume. The intermediate trend is now uncertain.
Short-term: Bullish above 3350. Bearish below 3293 (Jan.12 low).

On the 3-year chart, the false break above 3320, followed by a fast down-trend, is a bearish sign. We are likely to witness a re-test of support at 3160. 
Twiggs Money Flow (100) is headed for a test of its 3-month support level.
The primary trend is up. A fall below 3160 (the October 1 low) would signal reversal.
Intermediate term: Bullish above 3350. Bearish below 3160.
Long-term: Bearish below 3160.

Financial-x-Property Trusts [XXJ]* has made two false breaks through resistance at the top of the consolidation pattern. Narrow consolidation just below resistance, however, is still a bullish pattern. Relative Strength (price ratio: xjo) is edging upward. If there is a further breakout, it would be prudent to wait for a pull-back that respects the new support level.

Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) fell to 25 stocks, from 50 a week earlier. The highest reading was 131 on April 11, 2003 and the lowest, 8 on March 14, 2003. Prominent sectors are:

• Oil & Gas Exploration & Production (4)