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Trading Diary
February 20, 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 Dow Industrial Average closed at 10619 after testing support at 10600. 
A fall below the January 29 low of 10417 would signal a re-test of support at 10000.



The primary trend is up. Resistance is at 11300 to 11350. A fall below support at 9600 would indicate the start of a down-trend.
Twiggs Money Flow gives a weak distribution signal, having broken below its signal line.



The Nasdaq Composite closed down at 2037. The weak close and reasonable volume signal some buying support, which may result in a consolidation similar to the one following January 29. 
The intermediate trend is down. Support is at 2000.
The primary trend is up. A fall below support at 1640 would signal reversal.
Twiggs Money Flow is below its signal line. A retracement that fails to cross above this line would give a strong bear signal.


 


The S&P 500 has crossed below the previous low of 1133. The weak close and reasonable volume indicates some buying pressure. 
The intermediate trend is uncertain. A rise above 1155 would be bullish. A fall below support at 1122 would signal a down-trend.
The primary trend is up. Expect strong support at 1000. A fall below 960 would signal reversal.



The Chartcraft NYSE Bullish % Indicator retreated sharply to 85.49%.


Jobless claims lower
New unemployment claims fell to 344,000, compared to 368,000 the week before. (more)


Treasury yields
The yield on 10-year treasury notes closed at 4.10%.
The intermediate trend is down.
The primary trend is up. A bearish descending triangle has formed on the weekly chart; a close below the low of 3.93% would signal reversal.



The yield differential (10-year T-notes compared to 13-week T-bills) is a healthy 3.2%. See Interest Rates for an explanation of the yield differential.




Gold
New York: Spot gold fell through support at 400, closing at $397.20.
The intermediate trend is down.
The primary trend is up. A fall below $370 would signal reversal.




 
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ASX Australia
The All Ordinaries retreated to 3359. Lighter volume indicates that sellers lack commitment. 
For the fast up-trend to continue, the index must respect support at 3350. A follow-through above the high of 3372 will be a bull signal. A fall below Monday's low of 3333 would be bearish.



The intermediate trend is up. A fall below support at 3320 would be bearish.
The primary trend is up. Resistance is at the 2001/2002 highs of 3425 and 3440. Support is at 3160.

Sectors
 The 11 sectors (10 + Property) are in various market stages. Relative Strength (xjo) measures the performance of each sector relative to the overall index.
  • Energy [XEJ] - stage 2 (RS is rising)
  • Materials [XMJ] - stage 2 (RS is level)
  • Industrials [XNJ] - stage 2 (RS is rising)
  • Consumer Discretionary [XDJ] - stage 3 (RS is level)
  • Consumer Staples [XSJ] - stage 3 (RS is falling)
  • Health Care [XHJ] - stage 1 (RS is falling)
  • Property Trusts [XPJ] - stage 3 (RS is level).
  • Financial excl. Property [XXJ] - stage 2 (RS is rising) 
  • Information Technology [XIJ] - stage 3 (RS is level)
  • Telecom Services [XTJ] - stage 3 (RS is falling)
  • Utilities [XUJ] - stage 2 (RS is level)


Sectors: Relative Strength
A stock screen of the ASX 200 using % Price Move (1 month: +5%) increased to 40 stocks, from 21 two weeks ago.
The highest reading was 131 on April 11, 2003 and the lowest was 8 on March 14, 2003. 
Prominent sectors:
  • Diversified Metals & Mining (5)
  • Construction Materials (3)
  • Banks (3)
Interesting also to see steel producers Onesteel and Bluescope on the list.
(The figure in brackets show the number of stocks returned from that industry).






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

Colin Twiggs


We are what we repeatedly do - excellence is not an activity, but a habit.

~ Aristotle.



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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.