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

To: Judy who wrote (4782)	7/16/1998 6:54:00 AM
From: Bwe	Read Replies (1) \| Respond to of 34811

Judy.....The new status for the Drug group this week is Bear Correction. Last week the group was Bear Confirmed. A sector becomes Bear Confirmed when it gives a sell signal on it's sector chart. On the other hand, Bear Correction occurs when a group reverses back up into a column of X's above the key 30% level. Had this up side reversal taken place while the group was at 30% or below, the Drug group would be in a Bull alert mode and the complexion and outlook for the group would be different. At this point it's a matter of interpretation. Here's what I mean. Groups that are in Bear Correction status usually signal a temporary up move that is OK to play on the long side, but warns of further weakness and an eventual move to 30% or below to complete the decline. The Drug group has declined from 62% to 36% and that's a pretty steep decline. A look at the Drug Group bullish % chart shows the group has reversed up from the 34-36% level on 8/96 (34%), 4/97 (34%), 9/97 (36%), 12/97 (36%) and had great moves to the up side where you could've made good money by buying sector leaders after the reversal into a column of X's. In this case the historical action of the Drug group tells us more about what is likely to happen next as opposed to the traditional thinking that goes along with a Bear Correction market. Eric has written about this very topic but only hinted about the variations he uses to describe the Bullish % chart formations for sectors. Eric, this would seem like a good time to add your valuable insight to this discussion. Longwinded, but I hope this gives you a better idea of p&f sector analysis. Take care, Judy. Bruce