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

To: Smooth Drive who wrote (3050)	5/15/1998 6:20:00 AM
From: Quest	Read Replies (1) \| Respond to of 34811

Now that the NYBP indicator is in a column of O's what are recommended strategies. Go short the market? Short stocks/sectors in which the bullish % is above 70? Would appreciate comments on this. All the best. -Q

To: Smooth Drive who wrote (3050)	5/15/1998 7:44:00 AM
From: Mr. BSL	Read Replies (1) \| Respond to of 34811

Hi Eric. I am currently reading the "new" (1990 edition) of "Three-Point Reversal Method of Point & Figure Construction and Formations" by M. Burke. Concerning the Bullish Support Line (paraphrased) - The up trend is over if a column of O's touches the BSL and the column of O's exceeded a previous column of O's on it's way to touching the BSL. If the column of O's did not exceed a previous column of O's before it touched the BSL, then the up trend is still intact until the column of O's exceeds a previous column below the BSL. He gives several examples of a column of O's going a few boxes below the BSL where he considers the up trend still intact. Keep up the good work. I like your detailed posts. Duke

To: Smooth Drive who wrote (3050)	5/15/1998 6:19:00 PM
From: Bwe	Read Replies (1) \| Respond to of 34811

Hi Eric....Wonderful response to my post on the bullish support line (henceforth abbreviated on my own charts and this thread as BSL in your honor) which has prompted some discussion on fine tuning the finest type of stock charting, point & figure charting. Since I know you get Chartcraft charts, I would like you to take a look at the chart of Capital One Financial (COF). COF is a strong stock and a Zacks portfolio recommendation. By the strict definition of the BSL, the BSL from the 12/94 $14 low would've disappeared in 5/97 at $32. A new BSL would've been drawn at the 5/97 low of $31 and that BSL would be your major support going forward. Now let's go back to the original BSL and please extend that line into '98. In this case, it's simply a matter of a couple of $'s and the difference in support prices is minimal. My purpose here is to illustrate how the first support line, was in fact, the support for the stock as is plainly evidenced from 10/97-1/98. The stock is currently so far above either BSL that one can get a nosebleed just looking at the chart. My point being that, yes, a new BSL should be redrawn when broken to the downside. However, I believe one should not ignore a long term BSL that comes back into play by rising back above the BSL within a few months after a stock's broken support. If a stock has the gumption and strength to rally back above a trendline as important as the BSL, then it's my feeling that the support line should be recognized as support once again. I'll post other examples with different implications in the days ahead. Best regards, Bruce

To: Smooth Drive who wrote (3050)	5/17/1998 3:14:00 PM
From: Bwe	Read Replies (1) \| Respond to of 34811

Hi Eric, Let's turn it around a bit now and look at the other end of the spectrum, the Bearish Resistance Line (brl), while keeping the concepts we've been discussing in mind. I'll be using Cliffs Drilling (CDG) as our example. I posted a short while ago about the positive turn the p&f technicals of CDG had taken, the most exciting of which being the upward move through the brl at $54. That brl was a real bummer for the stock as it was drawn from the 11/97 $83 high and on only one previous occasion did the stock even come within a few dollars of breaking through. But break through it did and this p&f chartist was singing a happy tune. To briefly review the rest of the technical picture, CDG gave a double top buy signal at $45 in April. The stock's bullish RS moved into a column of X's and then the number 3 and 4 hitters came up to the plate; a bullish catapult formation at $54 and a break of the brl, also at $54. The stock moved to a high of $57 and has subsequently reversed course, giving a sell signal at $51, with a downside price objective of $47. Wouldn't you know it though, the stock moved back below that nasty brl that "disappears when it is touched by an upward price change". I've dutifully drawn in another another brl from the recent $57 high, but I'll tell you what, the stock's quarrel is with Mr. $83 brl, not Ms. $57 brl, IMHO. Eric, Jan, Ben, and all the nice folks on this great thread, I anxiously await thoughts and responses to this topic of great importance to me, the breaking of the major trendlines and their subsequent usefulness and importance as support or resistance thereafter. Best to all, Bruce