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Trading Diary
February 11, 2004

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 market responded well to Alan Greenspan's positive view of the US economy and his statement that the Fed would be "patient" about raising interest rates.(more)
The Dow Industrial Average rallied through resistance at 10600, making a new 2-year high on higher volume. A pull-back that respects the new 10600 support level would be a bullish sign.
The intermediate trend is up. Overhead resistance is at 11300 to 11350.
The primary trend is up. A fall below support at 9600 would signal reversal.

 


The Nasdaq Composite rallied to 2089 on strong volume. 
The intermediate trend is uncertain after the upward break. Resistance is at 2153; support at 2000.
The primary trend is up. A fall below support at 1640 will signal reversal.


 


The S&P 500 also closed at a new high of 1157, on strong volume. 
The intermediate trend is up, but overhead resistance is close by at 1175.
Short-term: Bullish if the S&P500 is above 1150. Bearish below the recent low of 1122.

The primary trend is up. A fall below 960 would signal reversal.
Intermediate: Bullish above 1122.
Long-term: Bullish above 1000.

 


The Chartcraft NYSE Bullish % Indicator is up at 84.97%.


Treasury yields
Following the Fed Chairman's comments, the yield on 10-year treasury notes fell to 4.02%, continuing the intermediate down-trend.
The primary trend is up. A close below 3.93% would signal reversal.





Gold
New York (21.11): Spot gold is up at $411.70.
The intermediate trend is still down. Support is at 400.
The primary trend is up.




ASX Australia
The All Ordinaries rallied to test resistance at 3320 before retreating slightly to close at 3315. High volume indicates selling pressure. The intermediate trend is uncertain. A follow-through above 3320 will be bullish. A fall below 3266 would signal the start of a down-trend.



Twiggs Money Flow (100) is at its 3-month support level, but still appears weak.
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.


Record Investments [RCD] 
One of our readers pointed this out: RCD has rallied above a mid-point consolidation but Twiggs Money Flow continues to fall, displaying a strong bearish divergence.



I have highlighted large volume days over the last 4 months, selecting an arbitrary level of 300,000. All but two of the days, [7] and [11], show signs of distribution. Weak closes can be explained by a seller with a large parcel of stock selling into rallies: at [4], [9], [12] and [14]. This would disguise their presence. Narrow ranges after a strong upward day tell a similar tale: the inside day after [4], and at [6], [8] and [13].



Selling has been very controlled throughout, with only two days, at [5] and [10], where selling continued after the rally ended. The latest bar seems stronger and a pull-back that respects support at 3.50 will be a bullish sign. A fall below the low of 3.41 would be bearish. I would not touch this unless there is a radical improvement in TMF - it would be foolhardy to ignore a key indicator.





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

Colin Twiggs


Anyone who stops learning is old, whether at twenty or eighty.
Anyone who keeps learning stays young.
The greatest thing in life is to keep your mind young.

~ Henry Ford.



 
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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.