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To: wanna_bmw who wrote (166688)	6/20/2002 1:37:42 PM
From: Tenchusatsu	Read Replies (2) \| Respond to of 186894

WBMW, <Do you think you could give me a few "pointers" on how to use your graph?> What for? You might as well gain pointers on how to use the phases of the moon to beat the odds in Vegas. These fly-by-night TA guys are something else. Tenchusatsu

To: wanna_bmw who wrote (166688)	6/20/2002 2:11:30 PM
From: Alan Smithee	Read Replies (1) \| Respond to of 186894

wanna_bmw Point & Figure charting takes into account supply and demand, without reference to time. In general, it's a pretty good gauge of where a stock (or an index) is headed. The chart consists of columns of X's and O's, with X's reflecting upward price movement and O's downward. Stocks priced between $20 and $100 have a box size equal to 1. If the stock is in a column of X's you check the high and low of the day. If the stock printed (at any time during the trading day) a price in the next box, you add another X. If not, you do nothing. Conversely, if the chart is in a column of O's you add a new O if the stock hit a price equal to the next box down (i.e., if the last O was at 23, and the stock sometime during the trading day hit 22, you add another O to the chart). The chart does not reverse down (if in X's) or reverse up (if in O's) unless you have three-box reversal. That is, if the chart is in X's with the last X at 23, a print of 20 would reverse the chart into a column of O's. This smoothes out day to day variations in stock price and only takes into account major price moves. Looking at the INTC chart that I posted, INTC was in a tight trading range between May 2001 and September 2001 (beginning of months are noted as a number, with October switching to "a", November "b" and December "c". INTC gave a quintuple bottom sell signal in September 2001 when the stock printed 26. Big no no in Point & Figure circles. Most PnF charters would have exited the position there. The stock dropped to 19 (or below, but didn't print 18.50) and that is where the column of O's stopped. The print of 21 was a three box reversal to X's, indicating buyers were coming back, and the position could be re-entered there. INTC kept going up, and an X was added to the chart for each $1.00 of price movement. A print of 33 reversed the chart to O's, but it set a higher low at 32, and reversed up again. So far so good. Except it failed to continue the uptrend, and didn't even test resistance set up by the top of 36. It reversed down again and gave a new sell signal with a double bottom break at 31. Reversed back up, down again after setting a lower high, new sell signal at 28, reversed up, again a lower high, reversed down and triggered a new sell signal at 27. The stock reversed back up into X's but couldn't punch past resistance at 31. It reversed back down, and triggered yet another double bottom sell signal at 25. For PnF purposes, the stock has been on a sell since the double bottom break at 31 followed by a failure to trigger a new buy signal. That was back in February of this year. Tenchusatsu might think its TA mumbo jumbo, but the handwriting has been on the wall for some time. Sorry if my explanation was convoluted. A better introduction to Point & Figure charting can be found at the Dorsey Wright site: 208.149.108.6