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

To: wizzards wine who wrote (4209)	6/29/1998 7:07:00 AM
From: Bwe	Respond to of 34809

Hi Wizzie...I'd like to put my two cents in on your question. This would be paraphrasing Tom, but I believe that it's pretty accurate. As p&f chartist's, we're first looking to see who has the ball; the market or the investor. We use technical indicators such as the NYSE Bullish %, OTC Bullish %, % of Ten/30 to make that determination. After we make that determination, we see where we can run our plays or what part of the field we can hit to. In this respect, we use Sector Analysis with bullish %'s as our guide. This gives us an idea whether our players, when considered as a unit, are looking to have a good game or a lousy game. Whether they're getting tired after having a great game (overbought and over 70%), or have taken their lumps after a batting slump but are still prime time players (oversold and below 30%) and can produce for the team once again. We then have to decide who we're going to send up to the plate or hand the ball off to. We also need to know what the potential is of the player we are putting our team's fate in of hitting a home run or scoring a touchdown. Does our runner have breakaway speed and the potential to run a long way. Are we sending up a singles hitter or a homerun hitter. With this analogy in mind, we can apply the same approach to individual stocks AND popular market averages. We take a look at their charts (stocks and market averages) and by using trend lines and chart patterns we can interpret their meaning, and also,to use our sports analogy, how far they are likely to run or hit the ball. That's where we are able to use price objectives to see how far a stock or market average is likely to rise or fall. The vertical count is as valid with market averages as it is with individual stocks because, like stocks, market averages are price based, not distillations of buy/sell signals for the market or a sector. Price objectives can be reached for market averages in the same way they are for individual stocks. Trend lines and all other point & figure fundamentals should be applied to market averages as well as individual stocks. Take care, Preston. Bruce