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

To: Bwe who wrote (4198)	6/28/1998 1:00:00 PM
From: Ben Antanaitis	Read Replies (1) \| Respond to of 34806

Bruce, In my case, since I use log scaling, the patterns do not change post-split. I guess someone who uses a chart service and happens onto an issue just has to go with the pattern as it appears post-split. But, if you are aware of a 'higher order' pattern that was in effect before a split, I guess that that just gives you a warm-fuzzy indicator with which to view the stock. Not as important as an RS or sector indicator, but something you have in your corner the new guy doesn't have. If you are writing an analysis of the stock, you could mention what the current pattern was when the split occurred. If it were me, and I used the Chartcraft scaling technique, I guess I would track the stock in both pre-split mode and post split mode until either the pre-split pattern changed or a new pattern developed on the post-split chart. At that point I would use the post-split chart only. Ben A. ez-pnf.com PS While you are pondering this point, another thought just came to mind. This scaling effect could also significantly change the post split RS chart. It could take a stock that just turned from O to X back to a stock that is still in the column of O's trying to turn up into X's. (This also doesn't happen with log scaling.)

To: Bwe who wrote (4198)	6/28/1998 1:31:00 PM
From: wizzards wine	Respond to of 34806

Hi Bruce, I've gone back and looked at numerous charts on DWA and some that Tom doesn't have that I chart on AIQ regarding the effect that the split may have on the TA of the chart and how one evaluates the new formation after the split. On TJX with the post split still 15 X's up and the RS buy in X's, I then looked at how strong the RS really was to see if that would make any differance in how one might view the chart. Suprisingly, it would take a move down by TJX to 19 and the DOW rising to 9500 to reverse the RS to a column of O's. Thus the RS is very strong on this one. Next looking at the sector, Retailing in Bear Alert at 58, we find that the last four times the sector has reversed up into X's , it did so from 46, 52, 42, and 46 respectively. Add to this that the NYSEBP has not reversed up yet, and may not for a while, I'd be likely to look to this 15 box up on the current post split chart with an eye for taking some profits on the first 3 box reversal into O's. In looking at several of the others, and looking back at the surrounding indicators during the same time periods, I believe that by one using all of the tools one has available the likelyhood of getting in much trouble due to not knowing that a stock had split and thus the chart was not as a chartest would have seen per split will be minimized. Remember that this is as much art as hard fast rules, one must flow with the P&F and let it show you the way. Just my thoughts, Bruce. Have what's left of a great weekend, Later Preston

To: Bwe who wrote (4198)	6/29/1998 1:24:00 AM
From: Smooth Drive	Respond to of 34806

Good Sunday Evening Bruce, Now that's a good discussion question. I'm still stuck in P&F high school (been held back twice now) but I too have wondered about stock splits and their effect on a P&F chart. But I haven't given it much more than a passing thought. I see that Ben and the Wiz Man have provided input. You know that Tom has pondered this and will provide his much-learned insight. Me? Well when I don't have to deliver an extemporaneous speech or make a seat of the pants decision with the info then at hand, I like to use the slow Norwegian FACTS system. F: Stands for FACTS. Gather all the necessary facts. A: Stands for ANALYZE. Analyze the facts. C: Stands for COMPARE, CALCULATE AND CHOOSE. T: Stands for TIMELY. In a Timely manner, implement what you choose; and S: Stands for STUDY. Go back a study what you chose. How's it working? How would one use FACTS with your question about stock splits? 1) Is there a site that provides stock split info over that last 3 to 5 years? 2) Bastardize the Central Limit Theorem and take 30 stocks that are actively traded from small cap (say up to 2 billion) mid cap (up to 5 billion) and large cap (over 5 billion); 3) Back test and maintain two P&F charts for each of the 90 stocks on the before and after split; 4) Did it change trend lines and trading channels? Patterns? Buy/Sell signals?; 5) By how much? What's the actual standard deviation? 6) If it is big time different, what will you do about it? Shrug? Go to Ben's 2% box? If you want to lead the charge on something like I've outlined, I would be happy to take a number of the charts and back test them over a two or three year period and see what we see. A half dozen of us could do this in no time. Now, I'll make a slow witted seer's guess on what we would/will find: 1) A high pole on a stock split stock is one of the 20% that don't go lower than the previous column of O's. Why? Because the vast majority of stocks that split do so because they're having good times, not bad; 2) Any and all patterns up to the point of a stock split are now null and void, and they should be. It's a brand new game with different dollar amounts and new patterns, trend lines, trading channels and perhaps new money from new players who wouldn't have been in the game at the old price levels. (What do conventional bar chartists do when a stock splits? Doesn't their trend lines and patterns change as well?); and 3) The very nature of a stock split is saying something is a little radical right now --- a little out of the ordinary. So let's dust ourselves off, clean up the charts to recognize the change, and start fresh. Let the old chart die and the new birth begin. We shall see. Take care, Eric

To: Bwe who wrote (4198)	6/30/1998 3:42:00 PM
From: james ball	Read Replies (1) \| Respond to of 34806

Bruce on the split chart question. What happened prior to the split is gone. Years ago when MRK split 5 for 1 the chart was a horrible as one could have asked for. After the split the chart was as beautiful as one could ask for. The post split chart was what was to be used and correctly so. We can get trapped up making this is science we will go crazy. On the question of stocks in teh NYSE Mike and I are the same on the weekly numbers. However on the sectors we continually add more stocks to our database as our clients require. we then set them to the right sector and tend to have more stocks underlying our sectors than Mike has. However our numbers come out almost exactly the same. Mike and I exchange all our research, he gets our daily reports etc. Since we are primarily the only ones doing the total turn key job on P&F we typically like to stick together. We service two different parts of the investment community with some overlap. He and I are having dinner on the 13th in New York. He is without a doubt one of the greatest minds on Wall Street and was totally in my corner when we started Dorsey Wright. Upcoming we will be doing some joint seminars like we use to. Mike is also wtihout a doubt one of the greatest human beings around today. Tom Dorsey 8888 8888882222222222222222222222222222222222222222222222