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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Daveyk who wrote (6257)2/16/2000 9:40:00 PM
From: Lost1  Read Replies (3) of 9427
 
OK Dave..ready? Let's find the last sell signal. The column of Os from 18.5 down to 14. Now we need a buy signal to begin our column of Xs that will provide our PO. The first column of Xs right after the sell didn't give us a buy sig. So we wait....We retraced again down to 15.5...then the big day(s) came when we had a buy signal which ended up being a column of Xs from 16 up to 25. NOW WE"RE READY!!!

How many Xs are in our column? We have to deal with the value issue here. Xs below 20 are .5 as you know. We will therefore divide these by 2 when calculating. What we need to do is make 2 calculations. One for the Xs up to 20 and one for the Xs above..

Here goes:

UP to 20 we have 9 Xs..above we have 5
I'm going to do the lower values first.

9Xs (3) = 27..now we must divide by 2 since our value is .5
27/2=13.5...let's set this aside for now.

Go to our higher value Xs. We have 5, thus

5Xs (3) =15...we don't need to divide these by 2 as our value is 1 not .5...

Now we're ready to add our 13.5 (20 and below)to our 15 (above 20)which gives us 28.5.

We now add 28.5 to the bottom of the column of Xs where our count began....16.

28.5+ 16 = 44.5.

Notice that the column of Xs previous to our count column started at 14.5. I usually find it's more accurate to give yourself a little room for error here...possibly using 14.5 instead of 16 for the base/count number..It gives me a range of 43-44.5 as my vertical PO.

Hope that helps..

Adios
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