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Non-Tech : Dorsey Wright & Associates. Point and Figure -- Ignore unavailable to you. Want to Upgrade?

To: Cape Blanco who wrote (2790)	12/10/1999 12:12:00 PM
From: Ms. X	Read Replies (1) \| Respond to of 9427

Yay!

To: Cape Blanco who wrote (2790)	12/10/1999 12:17:00 PM
From: Ms. X	Respond to of 9427

DWA Reference Manual concluded. NYSE Bullish Percent This is our major market indicator which tells us whether to be on the offense or defense. It is calculated by dividing the number of NYSE stocks trading on point and figure buy signals by the total listed on the Exchange. The percent of stocks on buy signals in is then plotted on a grid from 0% to 100%, where each box equals 2%. Levels above 70% are generally considered overbought, and below 30% are considered oversold. The best buy signals come when the NYSE Bullish Percent goes below 30% and then reverses up (must reverse 6%). The best sell signals come when the indicator moves above 70% and then reverses below 70%. See next page for the NYSE Bullish Percent chart. There are six signals (referred to as degrees of risk by Dorsey Wright) associated with this indicator: Bull Alert: Characterized by the bullish percent falling to 30% or below and then reversing up into a column of X's. The traffic light turns green. Bull Confirmed: The strongest of market conditions. Characterized by a column of X's exceeding a previous column of X's. The traffic light is green. Bull Correction: The bull market is taking a breather though it should resume shortly. The traffic light is yellow. Bear Alert: Characterized by a bullish percent falling from above 70% to below. Profits should be taken or positions hedged. The traffic light has turned red. Bear Confirmed: The weakest of market conditions. Characterized by a column of O's exceeding a previous column of O's. The traffic light is red. Bear Correction: The bear market is taking a breather. Trading rallies could be seen but the bear market will likely resume. The traffic light is flashing red -- look both ways carefully before crossing the intersection. ** Remember, when evaluating any particular signal (or risk level), be sure to take into consideration the field position. Sector Bullish Percents Using the same concept as the NYSE Bullish Percent, we keep bullish percent charts of each of the 40 industry groups. The percent of stocks on buy signals in each sector is plotted on a grid from 0% to 100%. As with the NYSE bullish percent, the best buy signals come when a sector goes below 30% and then reverses up. The best sell signals come when a sector goes above 70% and then reverses below 70%. The same six signals (or risk levels) apply. Short Term Indicators NYSE Percent of Stocks Above Their 10 Week Moving Average: Charted on the same type of grid as the bullish percents. Buy signals are given when the index goes below 30% and reverses up, as well as when a column of Xs exceeds a previous column of Xs. Sell signals are given when the index goes above 70% and reverses down, as well as when a column of Os exceeds a previous column of Os. NYSE High-Low Index: This index measures the number of new highs made on the NYSE divided by the number of new highs plus new lows. This number is then recorded on a ten day moving average. The ten day moving average is then plotted on a grid from 0% to 100%. We look at the Percent of Stocks Above their 10 Week Moving Average and the NYSE High-Low Index in conjunction with one another. Buy signals are given when the index goes below 30% and reverses up, as well as when a column of Xs exceeds a previous column of Xs. Sell signals are given when the index goes above 70% and reverses down, as well as when a column of Os exceeds a previous column of Os. Bond Indicator Dow Jones 20 Bond Average: A long-term bond indicator which helps us weigh the advantages of holding interest rate-bearing securities. This average is plotted on a point and figure chart with a box size of .20. The average moves slow and does not often give signals, but when they occur, we pay attention. A sell signal, which is given when a column of Os exceeds a previous column of Os, suggests that rates are about to rise. The opposite holds for buy signals. For More Information... For a more detailed analysis of these topics, please read Tom Dorsey's book, Point & Figure Charting: Essential Applications For Forecasting & Tracking Market Prices. Available through Amazon, buy.com and at the DWA site. If you have additional questions, please call Dorsey, Wright & Associates, Inc. 8am to 4pm at (804) 320-8511.