P&F Chart School

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Finally, we've got something to talk about in P&F.

The drop of the last three days is finally the break in the momentum we've seen since before Christmas- it's been nearly all straight up for a while. Now we've got the reversal again, and it's actually looking like a very good opportunity here.

I've labled a couple things in the chart-
#1 is showing that we've flipped direction finally. We got the three "O"s appearing yesterday, finally breaking what had been a 13 "X" move higher since October. right now we're showing a fourth "O" appearing this morning. that's ok. I am actually expecting a fifith "O" to appear shortly, once we break below 1100.

I think this is a buying opportunity, for the following reasons: First, we;ve actually got three nice support levels built in not far from where we are now. The first one is right about 1100. The 1100 area held pretty nicely yesterday, and today's action shows that some money is coming back in when we get close to the 1100 mark. Looking pretty good. It's about even with the LAST up cycle peak, (that previous row of "X"s, where we topped out just over 1100 before the last run up hit.

The next support level is in the 1180 level. Just 20 points below- where we had several peaks before. That one looks pretty firm too. So we have two opportunities here to create a new floor.

After that, there is a gap before we hit the next resistance level, which is down around 1040 to 1050 level. Now that one would be consistent with the 200 day moving avarege, and also with the last several up and down cycles we've been through. Should the first two resistance points fail, that third one is looking pretty strong as a resistance point.

Here's the chart today:


Too early to tell if this is just a normal retracement, or if the direction is actually changing into a negative bias. I really don't see anything out there which would put us into a fundemental change in direction- other than the fact that we really are due for a pullback after the last six -seven-eight month run.​

Personally, I'm staying in- I think we'll finish out today a little lower, but then I think we're good and consolidated for a higher run next week. Only time will tell.

I noted on the bottom "Break of MO"- break of the momentum of the last two months. Just pointing out that we've had a great last couple of months- and we were stretched out there. I think we'll see sidewise movement for a bit- and then a nice recovery again. We'll see how it plays out.​

Good luck, and happy investing.​
 
"The next support level is in the 1180 level. Just 20 points below- where we had several peaks before. That one looks pretty firm too. So we have two opportunities here to create a new floor. "

I think you mean 1080, not 1180. Outside that minor correction, excellent analysis as always. Thank you James.
 
This morning's action triggered a "high pole warning".

At this point I still think it's just a technical thing- with resistance still below us at 1080 that we haven't reached yet. I'm not going to be concerned unless we blow through that 1080. Otherwise I think it's just part of the normal cycles here.

However, I figured I would post that the High Pole Warning signal triggered this morning.

Good luck.

Chart courtesy of http://stockcharts.com ( a great site to learn from- I highly recommend it).​
 
Quick review this morning. Everything on P&F charts is still telling me that there is significant resistance built in at 1080 range. (1070 to 1085 or so). I think that will be a nice cushion, unless some outside factor hits us.

Looking at the candlestick chart- there ARE a couple gaps showing- one at 1070, and another one down at 1015 to 1020.

I really don't expect the 1070 to be reached, but you never know. I really am thinking still that the 1080 will continue to act as resistance. We'll see.​


Good luck.​
 
James,

SPX dropped to 1071.59 intraday on Friday. In terms of the P&F chart system is this a good support bottom to start a short-term upswing? Your update will be appreciated. Thank you.
 
It COULD be a good support. Here's the chart as we look at it today. We filled in that gap I mentioned between 1070 and 1080. So far, that has been the holding point.
​

The P&F chart is showing this this morning:
View attachment 8128

#1 is this fairly solid resistance point at 1070 level. That's a previous turning point in prior cycles up at down, and remains, so far, as a point where money flow starts to kick in. It COULD be the floor in this cycle.

However, the possibility also exists that we could break through that floor- we need to wait and see what happens. If the 1070 mark falls, the next real hard stop is the 1040 level. That is the level that the normal up and down cycle kicks in. I've marked that as point #2.

And on this chart, I've marked as #3, the volume in the negative flow- i.e. the amount of money that has changed hands since we reversed direction. At this point, I am thinking we've about run the course of a normal up and down cycle. That would mean, if true, that we've about run our course on the down side in this cycle. That would mean now is a good time to jump in.

However, if we have truely "lost our mojo" on the upturn, then we're in for some rough sledding ahead.

No clear picture, but hey, I'm in for the ride. We'll see how it goes.

Good luck.
​
 
This just got real, real ugly.

The 1070 point held most of the day- but that last hour it broke down. That is a very bad sign. Next point of resistance is at 1040. However, that's only part of the bad news.

I looked this afternoon at the X2 version of the S&P 500 P&F chart- one more sensitive than the conventional one. Right around this 1000 level I can't be sure whether to watch the conventional one, or blow up the movement times two (X2).

The X2 looks bloody well bad. Here it is. It's ugly.

View attachment 8194

Take a look. The last hour especially today, where we broke through the 1070 mark (2140 on this chart, remember, this is the S&P500 times 2) in that last hour. It sliced through it like butter.

And today we get a triple bottom breakdown. And a forcasted "Price Objective" of 1990.

That means this chart is showing we'll continue downward until we reach an S&P 500 number of (1990 /2 = 995) 995.

Ouch.

I should have bailed when we got the notice of the 'HIGH POLE WARNING" of the back on January 26th. Stupid me.

Oh well.

It's only a loss on paper, until the day you have to start taking it out.

I expect ugliness to continue tomorrow.

Good luck.
​
 
Here is today's P&F Chart.

I previously mentioned the hard stop at the 1040 level on the S&P, saying that if that one held, then it would be within the normal range of cycles.

Back on January 22nd, I said:
After that, there is a gap before we hit the next resistance level, which is down around 1040 to 1050 level. Now that one would be consistent with the 200 day moving avarege, and also with the last several up and down cycles we've been through. Should the first two resistance points fail, that third one is looking pretty strong as a resistance point.
Click to expand...

Then, I said back on February 1st:
However, the possibility also exists that we could break through that (1170) floor- we need to wait and see what happens. If the 1070 mark falls, the next real hard stop is the 1040 level. That is the level that the normal up and down cycle kicks in. I've marked that as point #2.

And on this chart, I've marked as #3, the volume in the negative flow- i.e. the amount of money that has changed hands since we reversed direction. At this point, I am thinking we've about run the course of a normal up and down cycle. That would mean, if true, that we've about run our course on the down side in this cycle. That would mean now is a good time to jump in.
Click to expand...


Well, the 1040 level held. The final downside in that cycle ended up being 1044 and change. And that made it exactly within the range of normal up and down cycles. The gap got filled, the 1040 level held solid, and we turned it around.

Today, we had a significant move- in that our new three "X"s appeared on the bullish action today. That confirms the up and down cycles have reversed, and our next target, on the upside, to fulfill our normal range of trading, will be a postive 1160 or so.

Here is the chart:


Very nice.​

Back to the upcycle bullish mode.​

Next pause on the up side will be 1160-ish.​

Note- I just looked also at the 2X P&F chart for the S&P 500. That one too was powerfully correct- it dipped to the blue line, then turned around. On the 2X chart this afternoon- it is saying double top breakout, and a new bullish price objective of 1130 forecasted. So there ya go- either 1130 or 1160 shortly, according to the P&F charts.​



That's my 2 cents- your mileage may vary.

Good luck.​
 
Last edited:
James48843 said:
Here is today's P&F Chart.

I previously mentioned the hard stop at the 1040 level on the S&P, saying that if that one held, then it would be within the normal range of cycles.

Back on January 22nd, I said:


Then, I said back on February 1st:



Well, the 1040 level held. The final downside in that cycle ended up being 1044 and change. And that made it exactly within the range of normal up and down cycles. The gap got filled, the 1040 level held solid, and we turned it around.

Today, we had a significant move- in that our new three "X"s appeared on the bullish action today. That confirms the up and down cycles have reversed, and our next target, on the upside, to fulfill our normal range of trading, will be a postive 1160 or so.

Here is the chart:


Very nice.​

Back to the upcycle bullish mode.​

Next pause on the up side will be 1160-ish.​

Note- I just looked also at the 2X P&F chart for the S&P 500. That one too was powerfully correct- it dipped to the blue line, then turned around. On the 2X chart this afternoon- it is saying double top breakout, and a new bullish price objective of 1130 forecasted. So there ya go- either 1130 or 1160 shortly, according to the P&F charts.​



That's my 2 cents- your mileage may vary.


Good luck.​
Click to expand...

James,

Your 2 cents are worth a million bucks!. Thank you.
 
James48843 said:
Here is today's P&F Chart.

I previously mentioned the hard stop at the 1040 level on the S&P, saying that if that one held, then it would be within the normal range of cycles.

Back on January 22nd, I said:


Then, I said back on February 1st:



Well, the 1040 level held. The final downside in that cycle ended up being 1044 and change. And that made it exactly within the range of normal up and down cycles. The gap got filled, the 1040 level held solid, and we turned it around.

Today, we had a significant move- in that our new three "X"s appeared on the bullish action today. That confirms the up and down cycles have reversed, and our next target, on the upside, to fulfill our normal range of trading, will be a postive 1160 or so.

Here is the chart:


Very nice.​

Back to the upcycle bullish mode.​

Next pause on the up side will be 1160-ish.​

Note- I just looked also at the 2X P&F chart for the S&P 500. That one too was powerfully correct- it dipped to the blue line, then turned around. On the 2X chart this afternoon- it is saying double top breakout, and a new bullish price objective of 1130 forecasted. So there ya go- either 1130 or 1160 shortly, according to the P&F charts.​



That's my 2 cents- your mileage may vary.


Good luck.​
Click to expand...


James,

On February 11, you posted the P&F chart showing a bullish 3 box reversal chart with a bullish price objective of 1295.0

Based on your experience with P&F, has anything changed that might have changed the outlook? The China raising of the banking reserve requirements, and the Greece and EU deficits, are significant issues that could affect the U.S. markets. Or is it too early to expect any measurable changes in trend? Thank you.
 
airlift said:
James,

On February 11, you posted the P&F chart showing a bullish 3 box reversal chart with a bullish price objective of 1295.0

Based on your experience with P&F, has anything changed that might have changed the outlook? The China raising of the banking reserve requirements, and the Greece and EU deficits, are significant issues that could affect the U.S. markets. Or is it too early to expect any measurable changes in trend? Thank you.
Click to expand...

I don't know.

So far, I don't see anything out of the ordinary. I think we're still fine.

Remember, that P&F works right up until the time that some outside influence switches things around.

Will China, Greece, or something big and bad happening at the Olympics affect stock prices?

Who knows.

We'll soon find out, eh?

P.S.- Weather forecasters get paid to forecast the weather. Sometimes they even get it right. But whether they are right, or wrong, they still have people watching them, no?

:-)
 
Note: While the S&P 500 is still mid stride on the climb up, (and so - no change- it still looks like it is going higher at a modest pace in this cycle)-

the "S FUND" chart did hit a new "Triple Top Breakout" today.


That means it's still got some juice carrying it higher, although I don't know how much higher in the "S" before we take a pause.

We've run all the way up past the highs of a couple months ago, and are WE ARE DUE for a slight rest sometime soon.

However, as of today, all indications continue for upward movement in the near term.​

Just thought I would throw that out there- "S" Fund hits a Triple Top Breakout, and continues strong. I expect continued strength, at least for the next day or two.​

Good luck.​
 
Nice move up today on the S&P 500 up to the 1138 mark, and climbing.

What is interesting to me today is that we're nearly at the same level as the last cycle- and, if things hold to normal, we should continue on Monday with a smaller gain, but still a gain none-the-less. At least, that is what I think I am seeing in this P&F chart today. Here's the chart:

View attachment 8599

At a minimum, this is telling me that we have climbed back up to the high region on this up cycle. We got some good momentum today, so I think that's a good sign to carry forward. I've marked on this chart the absolute top I think is within range on this cycle, before we pull back again. I've noted a place between 1150 and 1160 as the most likely target area on this move upward.

If we hit 1150, that would EQUAL the previous up cycle top.

If we hit 1160, that would EXCEED the last cycle up, and we should watch for the first sign of weakness and sell, as I am pretty sure that this is about all the S&P 500 will have on this short cycle up.

My humble opinion- (AND ALL BETS COULD BE WRONG, SO DON'T LISTEN TO ME) is that we're going to get a little more tweaking higher on Monday, and possible even into Tuesday, and then next week we're due to run out of steam, at least for the short term.

Again, upside is looking more likely than downside for Monday to me. We'll just have to wait and see what happens Monday.

Note- I've been also looking at the "S" fund chart, and the "I" fund chart, and both P&F charts are telling me we've pretty much run the course now on this cycle up. The "S" chart is fully extended out- so anything at all above here is gravy. The "C" fund chart still has this little more tweak left in it to go- perhaps another 15 to 20 points tops, before we reverse direction, and head lower again.

In short- if the S&P 500 P&F chart was a stoplight- it would be, today, slowly turning from "GREEN" to "YELLOW". Not quite enough evidence yet to get out for me personally, but definitely close enough for me to begin caution and closely watching every day now.

This is where I HATE the trade limits. If I had unlimited trade limits- then today I would move 30% of my funds off the table and into "G", and would then probably move more into "G" in a day or two- keeping some in right up until the thing reverses completely.

As it is, I can't do that- because using up two partial trades or more to get me positioned into "G" would lock me in for the rest of the month, and right now I don't know if that would be good or bad. If I was locked into "G", being it's only the 5th of the month, then I would be hosed later in the month at the next good buying opportunity.

So I am stuck holding BOTH my trades for the month in reserve.

By the way - for the month, we're up over 5%. Not bad, and worth considering locking in the profit.


Anyway- that's my 2 cents.

Good luck- and remember- don't listen to me. I'm not a professional. Nor do I play one on TSPTALK. YOU do what YOU think is best.

And good luck.


​
 
Last edited:
Well, we hit the magic 1160 mark yesterday- and the green "X" appeared. We also officially got a "Triple Top Breakout" yesterday for this cycle- a sign that we still may have a little "Ooomph" to go. Here is the chart:

View attachment 8702

Gut tells me to start watching here for the steam to run out- Normally I would say this is about all for this particular cycle up. However, the strength everything is showing also tells me we may not be done yet- maybe still another "X" or two possible. We are due, however, for a pause.

We'll just have to wait and see what turns out.

Good luck.


​
 
James, thanks for the update, I was just thinking about P&F this weekend, but forgot to bug you. :D
 
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