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, March 31, 2011

SPX - 1,400?

That's what the 5x3 H/L P&F is suggesting. A rapid recovery from the recent sell off, then a 3 box (15 point) reversal, then another reversal to the upside, giving the double top buy signal and activating that target. To the downside there is a target of 1,100 but this is not active. Would need to see a reversal to the downside and the low of that previous column of 15 0's to be taken out (ie a move below 1,245)

Yesterday's 5x3 closing P&F has active targets to the upside of 1,425 and 1,525 (the highest column of X's gave a target of 1,460 which is not active). Previous targets (1,235 and 1,320) have been met.

To the downside, the recent sell off has given a target of 1,120 but we would need to see a close below 1,255 for this to be activated. If the index closes above 1,335, ie above the level where this large column of 0's started, I would remove that target to the downside (as the move higher will be greater than the 14 boxes filled by the 0's).

Wednesday, March 30, 2011

RUT: new targets to the upside

Today's high/low 5x3 P&F - a new higher high, taking out the previous high column of X's, giving an active target of 955. There is also another active target at 990 and those previous targets from the bottom (810 and 830) have been met. There is still potential for this to reverse sharply but the current picture does not support this view.

The 5x3 'closing' P&F which only focuses on the closing level of the index also shows a new high today, higher than the previous high column of X's and an active target to the upside of 930.

Friday, March 25, 2011

SPX 4 hour 3x3 H/L - re-test of recent high?

Proquotes P&F tool is not the best but even so, there is a nice symmetary to this pattern. Three actived targets to the upside.

Thursday, March 24, 2011

FTSE 100 - further to run?

Those fib retrace numbers are all in reverse. So what says 61.8% should be 38.2% and vice versa..

Tuesday, March 15, 2011

Nikkei 225 - post today's action

I updated this (50x3 closing chart) myself post today's 10% move down - grim!

Sometimes when you get long tails down like this you can get a market bounce. The tactic would be to wait for a 3 box reversal to the upside, then go long but with a stop loss just below the current level. But that would be a high risk trade in Japan at present and its certainly not my recommendation. Until the nuclear reactors are brought under control, the uncertainty will undermine the index, in much the same way as it did for BP's share price last year -it only stabalised when they capped the Macondo well.

Friday, March 11, 2011

SPX: triple bottom sell signals

Rather like the FTSE 100 index, we have not seen a triple bottom sell signal on the SPX for ages. In fact, I think this is the only one on these charts and the first reversal/sell signal since the summer of 2010, such has been the strength of the bulls in the intervening period (that and a sprinkle of QE2).

The 5x3 H/L chart shows previous support at 1,305 held twice but has now fallen to the bears. Target to the downside is 1,255 and is active.

On the 5x3 chart based on the closing level only, there are two targets in focus. One at 1,250 and the other at 1,280. Similar picture, the bulls held that 1,310 level twice, managing to fend off the bears but the bears have managed to push through this level.

FTSE 100: triple bottom sell signal

Here's a pattern that's not been seen for many a month - a triple bottom sell signal on the 25x3 closing P&F. Note the previous resistance at 5,925 (on two occasions) has now been punctured and also the previous support seen at 5,875 has been taken out. There is still some short term bullish support to get through (thin blue line) but for now I have an active target to the downside of 5,625, which is also supported by the H/L P&F chart (not shown)

Thursday, March 3, 2011