Trading Diary
December 4, 2004
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purposes and should not be interpreted as investment advice. Full
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USA
The Dow Industrial Average is consolidating in a narrow band below resistance at 10600. A breakout above 10600 would be bullish, while a fall below 10350 would signal that a test of support at 10000 is likely.
Thursday and Friday display false breaks above the resistance level and strong volume: often followed by a test of support at the opposite border of the consolidation.
The Dow Industrial Average is consolidating in a narrow band below resistance at 10600. A breakout above 10600 would be bullish, while a fall below 10350 would signal that a test of support at 10000 is likely.
Thursday and Friday display false breaks above the resistance level and strong volume: often followed by a test of support at the opposite border of the consolidation.
Narrow consolidation below a major resistance level is a bullish
sign. A sustained breakout (not just a false break) above 10600
would signal that a test of 11000 is likely. A fall below 10000
would be a long-term bear signal.
Twiggs Money Flow signals strong accumulation.
Twiggs Money Flow signals strong accumulation.
The Nasdaq Composite has rallied to test resistance at
2150. Judging by the large volume and weak closes on
Thursday/Friday, we are likely to see some consolidation below
2150, or a correction back to test support at 2050.
The primary trend is up and
Twiggs Money Flow signals strong accumulation, rising well
above its' signal line.
The S&P 500 has successfully tested the new support
level at 1150/1160, signaling a strong up-trend. The index
encountered resistance on Thursday/Friday with two dojis
on strong volume. The dojis are positioned near the high of
Wednesday's strong blue candle: a fall below the top half of this
candle would be a short-term bear signal; otherwise buyers are
still in control.
Twiggs Money Flow continues to signal strong
accumulation.
The primary trend is up. With no major resistance levels overhead we can expect good gains. The projected target for the recently completed broadening wedge pattern is 1240: 1140 + ( 1160 - 1060).
The primary trend is up. With no major resistance levels overhead we can expect good gains. The projected target for the recently completed broadening wedge pattern is 1240: 1140 + ( 1160 - 1060).
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Treasury yields
The yield on 10-year treasury notes displays a breakout above 4.25%, completing the double bottom pattern at [1] and [2]. A successful test of the new support level, at 4.25%, would be a bullish sign. The target for the completed pattern is 4.50%: 4.25 + (4.25 - 4.00).
The yield differential (10-year T-notes minus 13-week T-bills) has declined to 2.1%.
Differentials below 1.0% are bearish.
The yield on 10-year treasury notes displays a breakout above 4.25%, completing the double bottom pattern at [1] and [2]. A successful test of the new support level, at 4.25%, would be a bullish sign. The target for the completed pattern is 4.50%: 4.25 + (4.25 - 4.00).
The yield differential (10-year T-notes minus 13-week T-bills) has declined to 2.1%.
Differentials below 1.0% are bearish.
Gold
New York: Spot gold rallied late Friday to close at $455.20. The metal has successfully tested short-term support at $450 and we can expect further gains. The next resistance level is likely to form at 500.
New York: Spot gold rallied late Friday to close at $455.20. The metal has successfully tested short-term support at $450 and we can expect further gains. The next resistance level is likely to form at 500.
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ASX Australia
The ASX 200 correction on Wednesday [W] was short-lived, but higher volumes on Tuesday and Wednesday signal increased resistance. Expect resistance to further increase as the ASX 200 and All Ordinaries approach 4000.
The ASX 200 correction on Wednesday [W] was short-lived, but higher volumes on Tuesday and Wednesday signal increased resistance. Expect resistance to further increase as the ASX 200 and All Ordinaries approach 4000.
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. The first major support level is at 3500 (xao: 3450): the highs of 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. The first major support level is at 3500 (xao: 3450): the highs of 2002.
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the Trading Diary.
Colin Twiggs
Foreknowledge (to approach a situation with
one's mind already made up)
is the beginning of stupidity.
~ Lao Tse.
is the beginning of stupidity.
~ 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.