Stock Indexes
September 30, 2006 0:30 a.m. ET (2:30 p.m. AET)
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Gold is testing resistance at $600 and failure of this level could signal another (intermediate) rally. Crude oil prices are testing support at $60, while the dollar remains uncertain. The probability of recession in the next four quarters is rising, according to the Wright model, and is currently at 37 per cent.

Long Term: The Dow remains in a primary up-trend, with support at 10700.




Long Term: The S&P 500 continues in a slow primary up-trend, with support at 1220.
The FTSE 100 is consolidating between 6000 and 5800, with Twiggs Money Flow (21-day) whipsawing around the zero line, signaling indecision.
Medium Term: Continuation of the up-trend is likely, with a close above 6000 signaling resumption of the primary trend move. A break above 6100 would have a target close to the highs of 1999/2000. The target of 6700 is calculated as 6100 + {6100 - 5500}.
Penetration of support at 5800, however, would signal another test of support at 5500 -- and a break of the long-term trendline would warn of a primary trend reversal.
Long Term: The primary up-trend continues, with support at 5500.

After a brief dip below support at 15700 the Nikkei 225 recovered and is rallying strongly. This is a bullish sign and a break through intermediate resistance at 16400 would confirm the strong up-trend.
Medium Term: Twiggs Money Flow (21-day) continues to oscillate around the zero line, signaling uncertainty. The next target for the up-trend is the April high of 17500, but we would need an improvement in TMF to achieve this.
Long Term: The primary up-trend remains up, with support at 14200.

The All Ordinaries formed a double bottom at 4940 followed by a strong rally to break through resistance at 5100. Tall blue candles and exceptionally high volume indicate that buyers have regained control from sellers. Look for confirmation of the breakout from a pull-back that respects the new support level at 5100.

Long Term: The All Ordinaries continues in a primary up-trend with support at 4800.

~ Jesse Livermore

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.