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).

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