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Trading Diary
April 24, 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 intermediate trend is
uncertain, with a lower trough followed by a higher
high. Volume increased on the rally after (the false break
at) [1], but Friday's weak close signals increased selling
pressure. Resistance at 10570 is significant: failure to
penetrate this level in the next few weeks, or a fall below
10250, would be a strong bear signal.
The primary trend is up. Resistance is at 10700 to 10750; and
support at 10000.
Twiggs Money Flow has crossed above its signal line but still appears weak. A fall below the March 24 low would be a strong bear signal.
Twiggs Money Flow has crossed above its signal line but still appears weak. A fall below the March 24 low would be a strong bear signal.
The Nasdaq Composite has surged strongly after a false
break [1] below support at 1980. Expect a re-test of resistance
at 2080. A double top pattern below the January high would be a
strong bear signal.
The primary trend is up. Resistance is at 2150; support at 1900.
Twiggs Money Flow is rising. Reversal below the March 24 low (0.05) would be a strong bear signal.
The primary trend is up. Resistance is at 2150; support at 1900.
Twiggs Money Flow is rising. Reversal below the March 24 low (0.05) would be a strong bear signal.
The S&P 500 surged strongly on heavy volume after a
false break [1] below support at 1120. Friday's inside day
signals consolidation before a likely re-test of resistance at
1150.
Last week's statement is incorrect: a fall below 1087 will not
yet signal a primary trend reversal - primary support is still at
960. Resistance is at 1160.
Twiggs Money Flow is weak but rising.
Twiggs Money Flow is weak but rising.
Treasury yields
The yield on 10-year treasury notes has rallied to 4.452%.
A successful break above 4.50% would signal a primary up-trend, while a rise above 4.67% would add further confirmation.
The yield differential (10-year T-notes minus 13-week T-bills) is a healthy 3.5%; indicating that long-term investors are demanding a healthy premium for tying up their capital.
The yield on 10-year treasury notes has rallied to 4.452%.
A successful break above 4.50% would signal a primary up-trend, while a rise above 4.67% would add further confirmation.
The yield differential (10-year T-notes minus 13-week T-bills) is a healthy 3.5%; indicating that long-term investors are demanding a healthy premium for tying up their capital.
Gold
New York: Spot gold closed at $395.00 after testing support at 390.
The intermediate trend is down.
Equal lows in an up-trend are not a bear signal, but a fall below $390 would signal reversal of the primary up-trend.
New York: Spot gold closed at $395.00 after testing support at 390.
The intermediate trend is down.
Equal lows in an up-trend are not a bear signal, but a fall below $390 would signal reversal of the primary up-trend.
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ASX Australia
The All Ordinaries has shown encouraging signs
over the last few days, holding above support at 3425 to 3420.
Heavy volume and a fairly weak close signal increased resistance
at 3472. A break above this level would be a bullish
sign.
The intermediate trend is up.
The intermediate trend is up.
The primary trend is up. A fall below last
week's low of 3416, while not strictly a horn reversal,
would be a significant bear signal. Thomas Bulkowski
(Encyclopedia of Chart Patterns) found that narrow double tops,
resembling two horns, are more reliable than broader double
tops.
Twiggs Money Flow may be forming a bearish divergence, which would signal long-term weakness.
Twiggs Money Flow may be forming a bearish divergence, which would signal long-term weakness.
Creating a Volume Moving Average
Volume Moving Averages help to identify unusual volume activity, like the volume spikes prior to the last two Microsoft reversals:
Volume Moving Averages help to identify unusual volume activity, like the volume spikes prior to the last two Microsoft reversals:
The indicator is not listed on
the Indicator Panel. To create a Volume Moving
Average:
-
open the Indicator Panel
- select Volume in the left column (or the right column if you want to edit the existing selection)
- in the center panel, select Daily at the top
- under Optional Indicator Smoothing, select an MA type (Exponential, Simple or Weighted) and enter a time period (e.g. 50)
- save the new settings [>] and close the Indicator Panel [x].
Indicator Help
The Indicator Panel
offers 3 separate help links (indicated by blue pointers):
The Indicator Panel
offers 3 separate help links (indicated by blue pointers):
- A selected indicator ( e.g. Volume) is linked to a Trading Guide which explains how the indicator is constructed, suggests suitable trading strategies, and offers practical examples.
- [?] links to the Indicator Help page which shows how to add Indicators
- Optional Indicator Smoothing explains how to add a moving average/signal line to an indicator.
Virus Watch
We have noticed a new email virus with the subject line: "Notify about your email account utilization".
The email warns that your email account may be infected by a proxy-related trojan server and suggests that you open an attached zip file for further information. Never open file attachments without first checking with the sender.
We have noticed a new email virus with the subject line: "Notify about your email account utilization".
The email warns that your email account may be infected by a proxy-related trojan server and suggests that you open an attached zip file for further information. Never open file attachments without first checking with the sender.
About
the Trading Diary has been expanded to offer further
assistance to readers, including directions on how to search the
archives.
Colin Twiggs
Markets are constantly in a
state of uncertainty and flux
and money is made by discounting the obvious
and betting on the unexpected.
~ George Soros .
and money is made by discounting the obvious
and betting on the unexpected.
~ George Soros .
Back Issues
Click here to access the Trading Diary Archives.
Click here to access the Trading Diary Archives.
Back Issues
Access the Trading Diary Archives.
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.