Point and Figure method - trading journal


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Today I have four strong stocks. These are in the Utilities group that has performed well and been a market leader for a period.

First a technical analysis of AME
here we broke through the resistance at around 35.50. Now we seems to have a quick pullback on lower volume and I would not be surprised to see us head up if markets want to go higher from here.

We can notice a nice wyckoff spring at the end of the trading range before the breakout. For Spring traders this was just screaming out to buy. Springs are something I have always had trouble with, although they are a very reliable signal. With some hindsight in technical analysis they are a great confirmation in my opinion.



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Next technical analysis is DE - Deere & Company. These guys make tractors!

Tractors are apparently selling well, because we are breaking out of every resistance point there is. The point and figure 45 degree down trend line, and any minor resistance on the way. Now we had a slight pullback, a trading range above the resisitance "creek" on diminishing volume.

Also here we can see the Wyckoff spring in first part of october. You had to be cool to enter on it, but you had also been happy with your profits.



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Then we have PHM. Never heard of em...

PulteGroup, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States.

Alrighty then, homebuilders. People need homes right?

Point and figure analysis - old resistance became support in the 17 level, now we are at resistance, or double top. We have a major diagonal uptrend in the bar chart. Strong.



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Then some Rock n roll:


The last three days have been exceptional.

The formation leading to that crazy breakout is quite strange with lower lows and lower highs. That's what some people would call a flag. Chart patterns were my introduction to price action analysis and trading. From that I moved to Richard D Wyckoff's work, and later simplified my own analysis with heavier focus on Point and Figure and confirming analysis on bar charts or candle stick charts.



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I just had to include this one also. SPRT. High risk - high reward?

I normally do not like these companies that are driven by news, but this pharmaceutical company apparently had a drug approved or something and the news made it blow through the roof. Now we are in a pullback after that news, and perhaps at a place where we might see a reversal.


About halfway of closing the gap. Normally a Wyckoff trader would consider the half-way point from top to bottom of pullback. When we're having a gap, we must look at it another way. Gaps want to be filled. That is one of their only reason for living.... A strong stock will not fill its gap, but it still wants to be tested. If we don't fill the gap, we are dealing with a strong stock.

Now, the point & figure chart just looks like a column of X and a column of O. Interesting to not when we're talking about half-way points - the column of X is 44 boxes, and the column of O is 22 boxes - and for those of you that know basic math, that is half.



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First of all,

sorry the post yesterday should have been SRPT and not SPRT - two different securities.

The one in my pics is SRPT.

Ever bought or sold the wrong stock? I have. You feel like an idiot when you do. It happens
to everyone once in a while I guess.


We had an up move in the markets. Dare we believe that it will continue, or did we see a reversal bar yesterday?
A "peek-a-boo" in the resistance zone at 1420? Will we jump into that zone or was it the last time we saw these levels
for some time?

Looking at the Spiders SPY.


The 5 box size says we're approaching a resistance zone above 145.
The 1 box size says we're heading down through the support at 142.

I wrote a little poem for you:

What do you do,
when you are in doubt?
When you don't have a clue?
You had better stay out!


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Is it safe to say that the general market does not like the elected president?
No confidence in the president's abilities to solve the financial trouble?

Is it safe to say that the market had a terrible day?

We officially jumped into the deep water, with a big splash. Huge bar, huge volume. Force.

I expect lower prices, with a test of the new resistance zone at some point.


We can confidently start looking at some short candidates.


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Yes we're heading downwards. The volume has picked up significantly - what I would call heavy selling.

The point and figure chart shows two levels of support at 137, the previous resistance level and a minor
45 degree trendline - both at the same level of 137. Another 45 degree trendline below that might
be the next support somewhere close to 134, where we also have a support level on the point and figure


Looking at the barchart we can see that recently up-moves have had smaller and more bara, while
the down moves have been on larger and fewer bars - this shows that the line of least resistance have been down.
Likewise we can also note that the volume has been heavier on the down moves.

The last two days have had much heavier volume than any other bar lately.



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An interesting thing to note, perhaps without much importance, is that the areas marked with the gray background are quite similar, while the first one is a little bit larger.

Counting the final down moves in these areas, in the first one we had 10 Os down, in the current one we currently have 7. If we would have symmetric down moves from the symmetric areas, we would see a down move of 8 Os to 138 level. Close to the support we identified in the previous post.



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CLNE - We have already fallen through the support that has been in place since June. We had a pullback which I missed, and
now a double bottom pattern, one of the basic point & figure patterns.



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Sundays are good for doing general market analysis before markets open on Monday. I'd rather take Friday afternoon off, and do it on Sundays instead.

S&P500 has been weaker than Nasdaq, on a long term scale - Big chart on the right is the Relative Strength of SPY and QQQ.


This is normal. Now that we are on our way down I am assuming technology based Nasdaq will perform worse.

We did have an up day on Friday - but not very big, more of a breather. But still a heavy reversal with a close on the low end of the range. Tried to go up, closed down - if we can't go up, we will probably go down.
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