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May 22, 2004
Twiggs Money Flow is bearish.
Twiggs Money Flow displays a strong bear signal.
Twiggs Money Flow shows a strong bear signal.
The Chartcraft Bullish Percent Index is on Bear Alert status, having eased to 59.13%.
The yield on 10-year treasury notes retraced to 4.764%. A correction that respects support at 4.50% will confirm the strong primary up-trend.
The yield differential (10-year T-notes minus 13-week T-bills) at 3.8% reflects expectations that rates will increase soon.
New York: Spot gold recovered slightly to $384.30. Expect the retracement to test resistance at $390.
The primary trend continues downwards.
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Reversal below 3390 on Monday will signal another test of support at 3350.
A fall below support at 3150 would signal reversal.
Twiggs Money Flow continues to display a bearish divergence, signaling long-term weakness.
There is a detailed explanation of the three pricing methods at Point and Figure Construction, but here is a brief summary:
The High/Low method attempts to approximate the early DeVilliers method of point and figure charting which used intra-day data. With highs in an up-trend, and lows in a down-trend, the method is more responsive to trend changes. It is suited to short-term point and figure charts: there are too many false signals for long-term charting.
Compare the High/Low and Closing Price methods with Yahoo Inc [YHOO]:
Generally, High/Low signals are earlier.
|Buy [b]:||When a column of Xs rises above the preceding column of Xs|
|Sell [s]:||When a column of Os falls below the preceding column of Os|
Closing price is more suited to longer-term charts; eliminating false signals caused by intra-day fluctuations.
This time we take a 5-year chart of Yahoo Inc [YHOO], with a box size of 5 and reversal of 3, and zoom in on the top pattern at the end of 2002:
Typical price uses a single daily price calculated as (High + Low + Close)/3. This offers further smoothing, enabling us to use a smaller, more responsive box size. Although not widely used, the method offers clearer signals, when employed on long-term charts, than the more commonly accepted Closing Price method.
Believing that personal gain is made by crushing others;
Worrying about things that cannot be changed or corrected;
Insisting that a thing is impossible because we cannot accomplish it;
Refusing to set aside trivial preferences;
Neglecting development and refinement of the mind;
Attempting to compel others to believe and live as we do.
- Marcus Tullius Cicero.
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