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

To: iGregor who wrote (5117)	7/27/1998 9:16:00 AM
From: chartseer	Respond to of 34811

East Pole When I started PnF charting I don t think we knew about RS but anyway over the years I noticed that PnF charting was very good at showing turn around situations especially a double or triple bottom where you see spread over the chart what appears to be a W. This pattern has given my some very good issues over the years. Reasons for buying puts in EK : 07/15 EK closed at 73 3/4 and gapped open at 79 1/2 a 5 3/4 point gap you can drive a truck through. Do you believe all gaps eventually are closed? 07/17 EK closed at 85 5/16 a Friday 07/20 EK posted a yearly high of 88 15/16 on Monday 07/24 EK closed at 84 3/4 below last weeks closing is this not a sign of a buying climax? EK has had a substantial run up too quickly and needs to consolidate which may result in a HPT. EK is one of last years DOGS of the DOW which means that if you follow the theory EK should be sold about now to lock in your profit. There are many who follow this theory. My mkt strength indicator turned bearish and I am expecting a weaker lower mkt reflected in a lower DJIA of which EK is a component. I believe the risk reward ratio in this situation is 2 to1of a lower EK. A possibility of at least 10 points down verses 5 points up .Buy stop at 89 or cover at 75. I am betting 75 before 89.