Trading Diary
November 13, 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
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USA
The Dow Industrial Average has continued to display strength since breaking through resistance at 10350: tall candlesticks, strong closes and large volume signal that buyers are in control. Expect a further test of the new support level, followed by a strong primary trend movement if successful.
The Dow Industrial Average has continued to display strength since breaking through resistance at 10350: tall candlesticks, strong closes and large volume signal that buyers are in control. Expect a further test of the new support level, followed by a strong primary trend movement if successful.
The longer-term chart displays the breakout above the
consolidation pattern. A correction that respects support at
10000 (or higher) would be a long-term bull signal. Expect some
resistance at 11000 but the next major level is 11400 to 11500.
Twiggs Money Flow signals strong accumulation, with (S/T) pull-backs respecting the signal line.
Twiggs Money Flow signals strong accumulation, with (S/T) pull-backs respecting the signal line.
The Nasdaq Composite broke through resistance at 2050
after a brief consolidation. The primary trend has completed a
large correction and reversed upwards. Strong candlesticks
and large volume signal increased momentum but expect a
pull-back, in the medium term, to test the new support
level.
Twiggs Money Flow (21-day) signals strong accumulation, with troughs (short-term and intermediate) above the zero line.
Twiggs Money Flow (21-day) signals strong accumulation, with troughs (short-term and intermediate) above the zero line.
The S&P 500 has cleared resistance at the
January/February peaks of 1160 and, after a brief consolidation
above the new support level, has surged upwards. However, we
should still expect a further test of 1160 support in the
medium-term. If successful, there are no major resistance levels
in the vicinity and we can expect good gains. The projected
target for the broadening wedge breakout is 1240: 1140 + ( 1160 -
1060).
Twiggs Money Flow signals strong accumulation.
Twiggs Money Flow signals strong accumulation.
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Treasury yields
The yield on 10-year treasury notes appears close to a double bottom breakout above 4.25%. The Wednesday Fed announcement and quarter point hike in the overnight lending rate have strengthened market expectations of further increases. A resurgence of oil prices, however, could slow the rate of increase.
The yield differential (10-year T-notes minus 13-week T-bills) remains at 2.2%. Differentials below 1.0% are bearish.
The yield on 10-year treasury notes appears close to a double bottom breakout above 4.25%. The Wednesday Fed announcement and quarter point hike in the overnight lending rate have strengthened market expectations of further increases. A resurgence of oil prices, however, could slow the rate of increase.
The yield differential (10-year T-notes minus 13-week T-bills) remains at 2.2%. Differentials below 1.0% are bearish.
Gold
New York: Spot gold consolidated in a narrow band above the new support level of $430 before surging to close at $437.40 on Friday.
Expect a further pull-back to test support at $430. If successful, we can look forward to further gains, with the next major resistance level at 500.
New York: Spot gold consolidated in a narrow band above the new support level of $430 before surging to close at $437.40 on Friday.
Expect a further pull-back to test support at $430. If successful, we can look forward to further gains, with the next major resistance level at 500.
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ASX Australia
The ASX 200 broke through resistance at 3850 before forming a doji star on Friday. Lower volumes and shorter candlesticks indicate a loss of momentum and we may be headed for another consolidation, similar to the one in October.
If the index holds above 3850 it would be a (short-term) bullish sign. A fall below 3820 would be bearish.
The ASX 200 broke through resistance at 3850 before forming a doji star on Friday. Lower volumes and shorter candlesticks indicate a loss of momentum and we may be headed for another consolidation, similar to the one in October.
If the index holds above 3850 it would be a (short-term) bullish sign. A fall below 3820 would be bearish.
Twiggs Money Flow is rising steeply, signaling strong
accumulation.
The primary up-trend is strong. The latest rally is unusually steep and at some stage (perhaps 4000) increased profit-taking will force a correction. Allow for a re-test of support at 3500 (the highs from 2002).
The primary up-trend is strong. The latest rally is unusually steep and at some stage (perhaps 4000) increased profit-taking will force a correction. Allow for a re-test of support at 3500 (the highs from 2002).
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Colin Twiggs
Plan for the difficult while it is easy;
Act on the large while it is minute.
The most difficult things in the world begin as things that are easy;
The largest things in the world arise from the minute.
~ Lao Tse
Act on the large while it is minute.
The most difficult things in the world begin as things that are easy;
The largest things in the world arise from the minute.
~ Lao Tse
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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.