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

To: Stoctrash who wrote (7370)	9/16/1998 3:32:00 PM
From: Ms. X	Read Replies (3) \| Respond to of 34809

Let's talk about the NYSE BP... Many questions again and I see them spattered throughout different threads. It is best to be clear as to what is going on and what the NYSE BP represents. You have to immediately separate the NYSE BP with the Dow Jones. They are not the same. The Dow Jones is 30 stocks that are calculated and give you the reading on that little bug seen on CNBC. The NYSE BP is 5000 + stocks spread between Dow and Nasd that are more representative of the average portfolio. The Dow Jones does not calculate buy and sell signals while the NYSE BP does. One can easily go up while the other goes down. It can be very confusing but if you just from this moment on say they are not the same, one has nothing to do with the other, it will be easier for you. Taking this year in perspective. In May the NYSE BP reversed down telling us that more stocks were starting to give sell signals than buy signals. What does that mean? Stocks were starting to break down on their charts. They were not holding support. Why? Who knows. Fundamentalist may know but as a technician all I can say is they did. What did this do? This affected the sectors. One by one the sectors started to break down on their charts pulling stocks in those sectors down with them. What did that do? It pulled down the NYSE BP. What did we see on the Dow? It was making new highs. How could that be? I'm glad you asked... I have to go back a little. We have the other indicators that you are also aware of. They told us that while the NYSE BP was becoming more negative, large cap stocks were still producing buy signals. The Dow is comprised of large cap. If they were still making highs than so was the Dow. But what was happening to the average portfolio? Well, if you didn't own the Dow 30, you were tanking. I'm not sure if you remember back then but we turned overall bearish but traded large caps (we don't need to go into all that). So, the NYSE BP gave you a better reading of the average portfolios while the Dow didn't. I've talked to many money managers and the picture is the same for all. Clients called in July wondering why and the Hell their portfolio was down 30% if the Dow was reaching new highs? If they followed P&F it could be explained. Now, eventually the Dow followed the NYSE BP didn't it? For months small caps and most issues were tanking and sectors were taken one by one behind the shed and shot. Finally, the Dow relented and started its decline. Notice in May you didn't hear all of the news you are hearing now. However, the NYSE BP was showing that "something" was on the horizon. All of which we didn't know then. Well, now the news is out. Now we can look at the chart and say "Oh, I get it..OK..yeah yeah Clinton, Russia, Japan..yadda yadda.. I can see why you reversed down at 70%..etc...At that time we didn't know the whole story, didn't have to, just relied on the NYSE BP. I am not in any way saying you shouldn't watch the economy, just putting this technical stuff in perspective. How does the NYSE BP turn back around? You know it takes buy signals. How do we get those? Well, since things tanked so heavy, it took an up and down movement on the charts to create these new signals. What the NYSE BP is telling us with this reversal back up is that enough stocks are no longer breaking down but rather showing demand. Think about this in terms of May. Everyone was shocked then right? You are shocked now I can tell. You are watching the news and saying how can that be? Guess what? You won't get the answer for months. I can't tell you. I don't know what the NYSE BP knows just like I didn't know what it knew in May. The NYSE BP is a sneaky little thing. It is contrarian to the bone. What can happen now? Can it reverse down again? Yup. Who am I to say it can't. Has it ever at this low level? Nope. Has it rallied up some and then reversed down? Yup. Has it rallied all the way up to 70% without a reversal? Yup. How do we analyse that? You don't. You don't predict. You follow it. Now, let's talk about that. With the NYSE BP in Bull Alert you have a little more freedom however... Don't go flying off the seat of your pants to buy the latest and greatest offered by Bobs fantastic stock fixins. Find good RS and trend line stuff. You know what to look for. Don't cheat yourself - get the good ones. Plenty out there. Go for the sectors that have reversed into Bull Alert. Don't run after RS negatives, trend line violations and sector poopiness...why? Too many bargains otherwise. What if it reverses down? We do exactly what we have always done. We go over our stocks. We stick to our plan. There is a difference when it reverses down at 40% as to when it reverses down at 70%. So we have to wait and see. I don't know when it will reverse but I will depend on the short term indicators to give me a clue. All and all folks, the news is out. The market will be volatile so buy your positions according to your investing stamina. We have a great opportunity here. I've never seen the NYSE BP steer people wrong but I've seen people try to predict where the NYSE BP will lead them...Kind of like going cross country with a road map and never looking at it? Why would you do that and take the chance of getting lost? Women would understand this but it might take men a few extra seconds to let it sink in. I am here to answer any questions. I know it is scary while listening to the news. Tom D never has CNBC on by the way. He just has his charts... Jan I am