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Trading Diary
March 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 showed a weak retracement [a] after last week's sharp down-swing: the rally only lasted one day, with low volume. A fall below Friday's low will signal a strong down-trend.




The primary trend is up. The current secondary reaction does not signal the end of the up-trend. A break below 10000 would likely test support at 9000.
Twiggs Money Flow displays a secondary signal, having broken below its signal line.




The Nasdaq Composite has consolidated after breaking through support at 2000. A fall below Tuesday's low will signal acceleration of the down-trend.
The primary trend is up. Initial support is at 1750 to 1780.


 
The S&P 500 has consolidated after breaking below support at 1125. the retracement failed to penetrate the new resistance level - a bearish sign.
The intermediate trend is down.




The primary trend is up. A fall below support at 1100 will signal a likely test of support at the 1000 level..




Treasury yields
The yield on 10-year treasury notes has consolidated below the previous support level, closing the week at 3.788%.
The intermediate trend is down.
The primary trend is down.




The yield differential (10-year T-notes minus 13-week T-bills) is at 2.8%; still reasonably healthy.




Gold
New York: Spot gold has rallied strongly to $412.10.
The intermediate trend has turned upwards, with a higher low followed by a higher high (above 405).
The primary trend is up. A fall below $370 would signal reversal.



ASX Australia
The All Ordinaries is testing resistance at 3425 and 3440; the highs from 2001 and 2002. The index has completed a false break above the previous high. A fall below Thursday's low of 3423 will be a short-term bear signal, while a fall below 3390 would be a stronger signal.




The intermediate trend is up.
The primary trend is up. Resistance is at 3440 to 3450; support is at 3160.






Stock Screening - Bollinger Bands
Bollinger Bands can be used to screen for trending or ranging stocks, depending on the settings. To screen for stocks in an up-trend:
  1. Open the Stock Screen module from the toolbar

  2. Select Bollinger Bands: 1 Standard Deviation
  3. Enter 100 as the 100-Day Minimum




This will return all stocks where the closing price is more than 1 standard deviation above the 100-Day moving average. For really fast-trending stocks, insert 150 or 200 as the minimum. This returns closing price above 1.50 and 2.0 standard deviations respectively.

For shorter time frames, insert the Minimum in the 50-Day or 20-Day fields.

To identify consistent trends, insert a value as the Minimum for all three fields. Be wary, however, of stocks that are in extended up-trends. They may not present the best opportunities.




Fortune Brands [FO] is the only stock in the S&P 500 that is above 2.0 standard deviations for the 20-Day, 50-Day and 100-Day moving averages. Twiggs Money Flow, however, is weakening.

Screening for down-trends
To screen for stocks in a down-trend:
  • Enter 100 as the 100-Day Maximum.

Screening for ranging stocks
To screen for stocks in a trading range:
  • Enter -30 as the 20-Day, 50-Day and 100-Day Minimum
  • Enter 30 as the 20-Day, 50-Day and 100-Day Maximum




 
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  • Point & Figure
  • Equivolume
  • Powerful new stock screens.

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Chart Forum: Adding charts to your posts
First, save the chart in Incredible Charts:
  1. Select File >> Save Chart As Image.
  2. Leave the chart size as the default 651 x 395 pixels
  3. Select a folder to save the chart in. 
    The path to the Charts folder in Incredible Charts is 
        C:\Program Files\Incredible Charts\{yourname}\{username+emailaddress}
        or C:\Program Files\Incredible Charts\Default\{username+emailaddress} for newer members.
  4. Alternatively, save the image to the My Documents\My Pictures folder.
  5. Save the chart as a PNG file.




Complete your post on the Chart Forum, leaving a space below the last line and then select the Upload Attachment button:
  1. Insert a short name for the chart (Eg. "MCD")
  2. Use the Browse button to locate the chart file (e.g. "mcd_ax09Apr02_to_13Feb03.PNG")
  3. Click the Upload button to upload the image.
  4. Cut and paste the image anywhere within your post.







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

Colin Twiggs


You are successful the moment you start moving toward a worthwhile goal.

~ Chuck Carlson.



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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.