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.
Thursday, October 27, 2011
On the daily, the FTSE 100 paid no respect to the 200 sma at 5,722.
Monday, October 24, 2011
Friday, October 21, 2011
Thursday, October 6, 2011
You can see the 'high pole' to the left of this 50x3 HL chart (4th column in with the 3 and in it - Mar, Apr). A big move up immediatley followed by a immediate 50% retrace which in this case became 100%. At present, the 6.150 target to the upside is still active and it can be seen that so far the index has not violated the 4,750 low from August. The rally we have seen in the last two days is a continnation of the recent pattern of sharp moves down, followed by quick rallies but the point to note is the lower highs and lower lows - bears are coming back in at lower levels and pushing the market down. This may not continue but it suggests the bears are in control. The move through 4,950 during the last sell off has activated 4,050.
Tuesday, October 4, 2011
Starting with the Dow (100x3) the 9,600 target is active and there is a target of 8,800 which is not active - need to see the index move below 10,500 to activate it. To the upside, the target of 12,700 is not active. We would need to see a three box reversal and a move up through the previous high of 11,300.
Monday, October 3, 2011
But once again it finds itself guilty by association, dragged down with the sector and clearly susceptible to a slow down in the Far East. Having reached a high of 1975p in late 2010, the shares have moved progressively lower and today achieved that 1225p price target from the high (a decline of 38%). The recent price action suggests the pace of decline has slowed a tad (ie falls of around 125p before the bulls come back in and reverse the column) but for now the bears have control. But that's not all............
On the 25x3 HL chart, we do actually have a new lower low (denoted by the red 0). There is an active target to the downside of 1575p and a new targert of 1050p, activated by this move below the previous column of 0's.
Friday, September 30, 2011
The bears have had the ball and been advancing down-field. The target of 36 given by the first column of 0's from the high was achieved and was triggered by a triple bottom sell signal. The target of 14 was also given by a triple bottom sell signal and is active.
Need to see how the pattern develops from here as it could be a potential H&S. If so, may get support here and ultimately a move back up to 45-46.
Thursday, September 29, 2011
I'm using a 100 point box size on the Dow to strip out a lot of the recent 'noise'. The initial reversal from the August sell off gave a target to the upside of 12,200, which was activated but never achieved. The index got as high as 11,700 then reversed lower. The target of 9,600 was formed by that column of 0's from the high and was activated when the index moved below 11,000 - its still active. The most recent action has been supportative to the bears, in that the index has reversed lower at lower levels and reversed higher at lower levels (ie lower highs, lower lows). See for example how it got to 11,500 before reversing down, then most recently reversed lower at 11,300. The 12,700 target to the upside is not active - we would need to see another three box reversal then for the index to move above 11,400, taking out the previous high. Finally, I have put that target of 6,700 on the chart on the basis that the previous support at 10,700 did not hold during the last sell off (the index filled the 10,600 prior to reversing - remember where you saw it first!!!)
Wednesday, September 28, 2011
Anyway, post the recent decline in gold, this relationship appears to have put in a bottom, even if it proves to be temporary.
- Both will rise but the Dow will rise faster than gold
Tuesday, September 27, 2011
There is an active target of 9,600 in place but i'd be looking for the current column of X's to reverse imminently. If it did reverse here, the current column of X's would give an (inactive) target to the upside of 12,700 - we'd then need to see a move up through 11,400 to activate it.
Monday, September 26, 2011
Thursday, September 22, 2011
The pattern still looks like a forming right shoulder to me and noting the support that the FTSE has had previously at this level, it is possible that the shoulder will continue to develop and the market will reverse higher, up to 5,300.
The other alternative is the shoulder breaks now and we get a 'hard down' progressive drop down through 4,800 (a previous level of support) through 4,500 and down towards 4,100.
Friday, September 16, 2011
There is a minor bullish support line to push through. The longer term line is still very much in tact and has not been challenged since early 2011.
The 25x3 chart shows just how parabolic gold has gone the last 2 years. The recent action has given a double bottom sell signal and an active target of 1,600. I haven't labelled it but there is also an unactivated target to the upside of 2,250 but we would need to see a move above 1,900 for this to be activated.
So thats the range - 5,100 - 5,400. For this recent pattern to continue, the market should sell off from here.
Tuesday, September 13, 2011
Monday, September 12, 2011
Friday, September 9, 2011
Tuesday, August 23, 2011
To activate the target to the upside, the index needs to pass through 1,210. To activate 990, the index needs to reverse and move through 1,120 and ideally 1,110.
The index pushed through the long term blue bullish support line at 1,170 and is currently in a state of bearish resistance, as denoted by the red line. Unfortunately I won't be around to see how this resolves, i'm off on holiday after tomorrow!