Point and Figure Method - Trading Journal

[PFtrader 10]

Welcome! Here is my trading journal with my:

 

technical analysis,

point and figure charting,

market analysis,

sector analysis,

Richard D. Wyckoff method analysis,

relative strength analysis,

and inner thoughts and feelings.

 

In my trading I have been using point and figure and the Richard D. Wyckoff method for many years now. I usually do top-down analysis by first identifying the market setup, I then do sector analysis and relative strength analysis to find the strongest or weakest stocks in the strongest or weakest sectors.

 

In my investing I combine fundamental analysis with the above and I use a few exceptional market timing signals for longer term bullishness or bearishness. These have showed to be far more accurate than my own feelings, so I’d rather trust the professional quantitative analysts than my own emotions. These signals are also used in my shorter term trading.

 

I will start this trading journal where I gather my thoughts and post my trading ideas. Instead of writing this down in my paper journal book, I’d might as well post it here if anyone is interested in reading.

 

These are my ideas, and you are invited to follow me. I like to exchange ideas and learn from my readers as well.

[PFtrader 10]

Here is a standard Point and Figure analysis / Wyckoff Technical analysis setup for AAPL that I have been trading with success this past year.

 

http://www.paf.am/?di=PWB8

 

This is what I usually look at in my technical trading: P&F chart of the stock. Bar chart of the stock. A P&F chart of the market (S&P 500). The Relative Strength versus the market. Usually I don't do RS analysis of the sectors. I get a fairly good view on the strong and weak sectors to avoid just by viewing their charts. As long as we are stronger than market, we're usually golden.

 

So what about the analysis of AAPL?

We are in a down trend with some kind of support at around 580. We already broke the 650 support. (And I got stopped out.) We went back to lick it (Wyckoff test of ice, guys). Markets seem to want to go south, but is hesitating a bit. AAPL is short-term weaker than the market which is generally not a good sign. AAPL has been a market leader for a long time, and when the market leaders stop going up, normally the rest of the pack will follow it sideways or down.

[PFtrader 10]

Looking at REED technical analysis today.

 

On the 1% point and figure chart we are at a nice level of support at this level:

 

http://www.paf.am/?di=BWUI

 

On the Candle stick chart we can see the nice uptrend. The last candle tried to go down but closed at the top - a bullish sign.

 

http://www.paf.am/?di=47BH

[PFtrader 10]

Let's have a look at URI, a stock I have been interested in a long time. Nice fundamentals and all.

 

We have quite a nice setup. We had a strong up move on heavy volume over the 37-38 area, gapped up even. Had a pullback/flat for a few days on much lower volume and then shot up again on heavier volume.

 

Another pullback/breather now, let's see the future.

 

http://www.paf.am/?di=IYWH

[PFtrader 10]

ECL is another stock on my list.

 

I really like the uptrend it is showing on the daily and weekly point & figure charts. The candlestick charts shows the latest strong upmove on high volume and BIG bars. Somebody really wants to own this company, but taking a breather at the previous resistance, now acting as support. A pullback to the side of the creek - for using the Wyckoff trader lingo.

 

Daily Point & figure chart

http://www.paf.am/?di=K3JL

 

with weekly point and figure chart:

http://www.paf.am/?di=65MA

[PFtrader 10]

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.

 

http://www.paf.am/?di=K6ZJ

[PFtrader 10]

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.

 

http://www.paf.am/?di=XVM8

[PFtrader 10]

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.

 

 

http://www.paf.am/?di=IELW

[PFtrader 10]

Then some Rock n roll:

 

ROK

 

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.

 

http://www.paf.am/?di=UY99

[PFtrader 10]

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.

 

http://www.paf.am/?di=E6D8

 

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.

 

http://www.paf.am/?di=9XDO

[PFtrader 10]

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.

 

 

Anyway....

 

 

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.

 

http://www.paf.am/?di=8EU3

 

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!

[PFtrader 10]

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.

 

http://www.paf.am/?di=SDGG

 

We can confidently start looking at some short candidates.

[PFtrader 10]

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

plottings.

 

http://www.paf.am/?di=IOCY

 

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.

 

http://www.paf.am/?di=8INT

[PFtrader 10]

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.

 

http://www.paf.am/?di=3ZLB

[PFtrader 10]

Let's look at some short candidates,

 

The bottom fell out - waiting for a bear pullback - XEL on a 1% chart

 

http://www.paf.am/?di=LPM4

[PFtrader 10]

FE - we're at the support, could enter on the break through, or wait for pullback would the breakout come.

 

http://www.paf.am/?di=5OVB

[PFtrader 10]

DUK - a nice "flagpole"? Are we heading down all the way?

 

http://www.paf.am/?di=6RZ9

[PFtrader 10]

D - here we're also at the support. The option is to enter on the break through, or wait for pullback afterwards.

 

http://www.paf.am/?di=5OVB

[PFtrader 10]

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.

 

http://www.paf.am/?di=28XM

[PFtrader 10]

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.

 

http://www.paf.am/?di=7TP7

 

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.

[PFtrader 10]

Facebook stock technical analysis

 

Assuming Nasdaq will perform worse in a bear market, it is safe to assume FB will perform badly as it has since the IPO. Action has been terrible and I feel for the people who bought there and then on promises. Who dares touching this one now. There are some technical points to consider which can provide for good setups. A break out below the 18 level would mean to me that we are heading down again, a confirming pullback on low volume for added confidence. The action in the current trading range is quite erratic. I don't see real stopping action, more a low base type of pattern.

 

http://www.paf.am/?di=PKKU

[PFtrader 10]

Approaching or breaking nearest 45 degree point & figure trendlines:

 

AEE BREAKING:

 

http://www.paf.am/?di=K1SM

[PFtrader 10]

PCG approaching 39-40 level P&F trend line

 

http://www.paf.am/?di=HC0U

[PFtrader 10]

PPL

 

Somewhat strong compared to the others, but at an interesting technical level

 

http://www.paf.am/?di=43MZ

[PFtrader 10]

SO

 

I don't want to own Southern

 

http://www.paf.am/?di=ZP0D