Welcome to EV's point and figures. This blog is dedicated to the use of point and figure charts in technical analysis.

Although P&F first appeared in charts in the 1930's, it is an often overlooked techique for analysing stocks and charts. A poor relation compared to line and bar charts and their range of momentum indicators. Yet few charts provide a clearer picture of the daily battle between bulls and bears for market control.

Like most methods, it should not be used in isolation. It should form part of an analysts 'tool box' and be used with other techniques to help form an overall view.

The charts that appear on this blog and any accompanying comments are purely for information purposes only - my own personal take on where the prices may be heading. They do not constitute investment advice.

Tuesday, July 27, 2010

S&P 500: update; Two minutes to midnight

On the SPX 5x3 closing chart the recent rally has pushed the index back above 1,100 and above the high created by the previous column of X's (1,095). The has given a double top buy signal and activated an upside price target of 1,235. Note the long term (blue) bullish support line remains intact.

Short term the SPX is now at a level where it has previously met resistance (at 1,115 - incidentally, the 200 day weighted moving average on the daily bar chart is at 1,117.13). If the market can push through this resistance, it could prompt a thrust higher similar to that seen back in March/April and give rise to some sort of double top formation around the 1,215. Just a thought.

To the downside, there remains in play an activated target of 935.

The 10x3 shows the resistance at the 1,115 level. There are two minor bearish resistance lines above that the index is going to have to content with shortly. To the downside, the target of 870 is still active.

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