The Market Indicators thread

[rub92me]

Thanks Snake, looks like that one is the most comprehensive one so may as well spend a little extra if it's good.

 

[Timmy]

Thanks Snake, I haven't read the DuPlessis book but it sounds very helpful. Snake, you mention myths being dispelled, is it possible for you to expand on what you mean with respect to P&F and the du Plessis book?

 

[It's Snake Pliskin]

Thanks Snake, I haven't read the DuPlessis book but it sounds very helpful. Snake, you mention myths being dispelled, is it possible for you to expand on what you mean with respect to P&F and the du Plessis book?

Timmy,

It doesn't really give a typical myth busting rundown on PF charting but rather gives a very good introduction to what they are, before it goes into the nitty gritty. In the introduction I learnd a lot.

It is interesting to see how they evolved also, not created, originally not for charting

I believe you need to read more than one book though. Overall I am happy with it.

 

[motorway]

Hi Rub

Best way to learn P&F is to do it

But you need to understand the principles that underlay P&F

What is it that makes a box
what does changing the reversal do
What are trend lines measuring
what is significant about 45 degrees

What draws the chart and makes the chart move.

Du Plessis's book is a compendium

Of various aspects and practices of P&F

An appendix lists the books he has consulted

You will learn more by reading those books ( and others )
Than you will from this one book

However as a thorough introduction with
a lot of examples esp on construction

it is OK

There are only a few texts on P&F
For the reason many charting softwares can not draw them
or very well..

It is an old technique ( Holland Tulip traders ? )
Probably re invented many times

pre dates bar charting in the USA
started to be used 1880s

It is not removed from the reality of the tape


It is just Xs and Os

too simple

but so are the 1s and 0s that create all the wonders of the computer age

So simple is not the same as profound..
Or not being effective


Some OLD books are very good
because they are not removed from the reality of the "TAPE"

Some quotes below are from the free E-Book I posted a few times
Though it is ON P&F RS charting

it is still P&F , It is these principles that need to be understood

The P&F chart NEVER has to move sideways
It only does so IF..

The Author ( clay allen ) refers to "Hidden Order"

Authors from the late 1800s and early 1900s

Referred to manipulation ... A 1926 book compares charts drawn by roulette wheels to stock charts

And how the way to make the Random chart look like a Stock chart
This comes back to the 45degree movement ( no matter what the box size is )

It is what Clay Allen obviously is calling hidden order

Another important aspect of performance measurement is the element of time.
The back and forth movement of this component of the performance measurement process is recorded across the horizontal X-axis on the chart. A new column is recorded whenever a reversal of relative performance exceeds the minimum absolute amount. This converts the horizontal X-axis from the measurement of time to the measurement of alternations of trend. The alternation of trend is a function of the stock’s volatility and that is a proxy for the stock’s risk. Therefore the X-axis can be characterized as measuring risk and not time.

Hidden Order?
The stock of Best Buy was chosen for this analysis because its performance over the year 2003 was among the top 100 performing stocks in the Market Dynamics database. The time period covered by this study is 253 days, or one full year.
The lower chart is a 3-point, point-and-figure chart of the relative strength of BBY over the past year. This chart has been cropped to focus on only the record for 2003.

The BBY point-and-figure chart shows an amazingly regular upward progression with only one significant correction. BBY remained above the 45-degree bullish support line during the entire time period covered. This suggests a regular or systematic process at work to steadily propel the stock price higher, relative to the S&P 500 during this time period.

The upper chart is a histogram of the daily percent changes in the price of BBY over the past year. The histogram shows the characteristic bell shaped curve that is usually produced by a random process. The sample is slightly skewed to the right and the average daily price change is .33% per day over the past year. During this time, 54% of the days were up and 46% of the days were down””very close to 50-50.

It is striking that the raw data looks so completely random. Yet the point-and-figure chart produced from that data looks so orderly. It’s as if there was an invisible hand guiding the stock upward in a persistent and regular pattern. This example clearly shows the results of the highly effective transformation of the raw data produced by the three-box, point-and-figure methodology.

The relative strength of the stock shows the characteristic saw-tooth, back and forth action and, in this example, the upward thrusts were greater than the downward reactions as the relative strength worked its way steadily higher. The point-and-figure chart clearly shows the ability of the point-and-figure methodology to remove the noise from the data.

The positive days were larger than the negative days, so the relative strength upward trends tended to accumulate to higher levels and the downward reactions turned out to be mild. When the relationship between the up days and the down days changes, the direction of movement on the chart will change. There are many examples of orderly patterns among the best performing stocks. There also appear to be orderly patterns when the trend turns down. It is amazing that random data could be transformed into such an orderly progression on the point-and-figure chart.- 99

Manipulation Detector
Hidden Order
Invisible Hands

Xs and Os
Charts not draw by time ( small t )
But by something else

The rhythm of broken rhythms


Here is the link to the book on RS P&F

http://www.clayallen.com/Winning The Performance Game 12-16-2006.pdf


motorway

 

[rub92me]

Thanks motorway. I can see lots of reading coming up. I'll be on plenty of long haul flights over the next couple of months so that will help pass the time a bit.

 

[Timmy]

Timmy,

It doesn't really give a typical myth busting rundown on PF charting but rather gives a very good introduction to what they are, before it goes into the nitty gritty. In the introduction I learnd a lot.

It is interesting to see how they evolved also, not created, originally not for charting

I believe you need to read more than one book though. Overall I am happy with it.

Thanks Snake, yes it sounds like a good one

 

[motorway]

For Discussion


http://www.qwafafew.org/?q=filestore/download/249

G. C. Selden was a very close associate of Richard Wyckoff

What was old is new again

Tape reading ---> Behavioural Finance

But tape reading was more than just Psychology.



Hope and Fear

some more context ( to compare with now )

Fear Driven bottom---> An Event

Hope unfolding top---> A Process

seen in

2000 & 2001

Also updated chart of the present.

A major juncture ( bottom pivot )
tends ( context--> what is the character of the instrument)
to need a significant
cohesion or alignment of
the tools( factors )
of manipulation



Price......uncorrected drive
Time .......running out
news..... BAD



motorway