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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: bobster who wrote (929)	2/20/1998 2:37:00 PM
From: Ms. X	Read Replies (1) \| Respond to of 34813

Who has news on the airlines? Missed it. They seem to all be down.

To: bobster who wrote (929)	2/20/1998 5:18:00 PM
From: Ben Antanaitis	Respond to of 34813

bobster: 2%... 3 box reversal... way to go. Chart patterns: A double top still acts like a double top, a high post still looks like a high post, setting stops at box levels still works.. the values turn out different, but the 'patterns' mean the same thing. Resistance/Support lines: "Traditional OR 2% log scaling". (I typed the original too fast and left the 'or 2%' off the sentence. STOP READING HERE if I answered your questions................... This part only applies when you crank down the box percentage and the chart w-i-d-e-n-s out because there are more columns: You need to be aware of where the long term resistance and support lines would be, based on plotting the chart with Traditional or 2% scaling. There are times when the long term support line isn't a 45 degree line in these 'trader charts', because you've stretched out the pattern by allowing many more columns to form. For example: This could happen in the case of a $100 stock that oscillated within a 4 point range for weeks. 100->103.5->100.25->103.75->101->105.875->100->104-> etc. The traditional or 2% chart would stand still, not growing or reversing. The 'trader' chart would have a whole series of short columns that could be played for a point or two... Now, if the long term bullish support line were just at 100 on the Traditional/2% chart and you just drew it as a 45degree angle on the 'trader' chart, you might think that the support line was broken within one or two of the 'extra' columns. Not so, most of the world is looking at the Traditional chart and to all those folk nothing has occurred on their chart, their pattern has stalled. The same caution is required when you are 'trading' near the bearish resistance line. A 'trader' chart might lead you to think that the resistance line has been penetrated, but the Traditional/2% chart was stalled, still beneath the long term bearish resistance line. In these cases, the support or resistance line is a horizontal line that corresponds to the price where the Traditional/2% resistance/support line would intersect the column that the Traditional/2% chart is working on. If that horizontal line gets penetrated, however,.. it's time to check the Traditional/2% chart for reference as to what is happening at a larger level. Look back at the forest instead of the individual trees. Well, I hope I answered your question and didn't confuse you too much. It is best if you understand the Traditional technique before branching out and tackling a derivative/alternate technique. Kind of like understanding Stocks before playing with Options. This isn't as wacky as it sounds, day traders in the commodities/futures pits use P&F to take positions during the day and they use things like 1 box reversal and .25% box scaling.. things like support and resistance lines are support and resistance points. It's a different use of the same techniques AND patterns. Ben A.