The Dow Industrial Average is testing resistance at 10200, within the consolidation pattern that started early 2004. Low volume on the rally signals a lack of commitment from buyers. 

The consolidation pattern may result in either an upward or downward breakout. Confirmation would come from a pull-back that respects support at 10500, or resistance at 10000, respectively.

Twiggs Money Flow has formed a double bottom but does not yet signal accumulation.

The Nasdaq Composite (and NDX) volume for Friday was incorrect. 
Select Securities >> Refresh Current Security From Server or fast key F2 to refresh this.

The primary trend is headed downward. The latest rally is on low volume and appears unlikely to break resistance at 1900.
Twiggs Money Flow (not shown) continues to signal distribution.

Similar to the Dow, the S&P 500 is testing resistance at the previous peak (of 1100). Falling volume signals a lack of commitment from buyers.

Twiggs Money Flow (not shown) continues to signal distribution.

NYSE Bullish Percent

The NYSE Bullish Percent Index rose to 55.48% but the bear signal continues.

Treasury yields

The yield on 10-year treasury notes is consolidating in a narrow range above 4.20%; normally a continuation sign in a down-trend. 
Expect a re-test of support at 4.00%. 

The yield differential (10-year T-notes minus 13-week T-bills) is declining but still healthy at 2.7%. 
Low differentials, of below 1.0%, are strong bear signals.


New York: Spot gold fell to $402.90. Marginal new highs indicate a lack of commitment from buyers.

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ASX Australia

The All Ordinaries rallied strongly above 3550, on increased volume. The next signal to look out for is a pull-back that respects support at 3550.

Broadening top formations may break out in either direction. They are often traded from a reversal at the upper or lower border, with stops adjusted to protect against a reversal at the opposite border. Double top or double bottom reversals near a border provide additional confirmation: see [a] and [b], [d] and [e], and [f] and [g] on the chart below. 
Note also the consolidations at [c] and [h], accompanied by a bullish pull-back on Twiggs Money Flow, which failed to cross below the signal line. A similar pull-back that holds above 3550 would be a bullish sign.

Windows XP Service Pack 2

Most readers should by now have received the Windows XP update to Service Pack 2.
This includes the new Windows Firewall. If you have not received the update:
  • Go to Start >> Control Panel >> System
  • Select the Automatic Updates tab
  • Select Automatic and click OK.
  • Then go to Start >> All Programs >> Windows Update
  • Select Express Install and click the Install button

Adding Incredible Charts to the new Windows Firewall
  1. From your Start button, select Control Panel >> Windows Firewall
  2. On the General tab, select On

  1. Select the Exceptions tab

  1. If IncredibleCharts Pro is not listed
    • Select the Add Program button
    • Select IncredibleCharts Pro from the Program List
    • Click OK

    If necessary, use the Browse button to locate the program.
    The normal location is C:\Program Files\Incredible Charts\IncredibleCharts.exe
  2. On the Exceptions list, check the box alongside IncredibleCharts Pro

  1. Click OK

Outlook Express Service Pack 2

The update also replaces Internet Explorer and Outlook Express.
You may need to reset your email browser to accept images:
  • Open Outlook Express
  • Select Tools >> Options
  • Go to the Security tab
  • Ensure that the box under Download Images is not checked

  • Click OK

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

Colin Twiggs

Success is a science: if you have the conditions, you get the result.

~ Oscar Wilde

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