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Point and Figure Charting: The Essential Application for Forecasting and Tracking Market Prices, 4th Edition

Book Description

An up-to-date look at point and figure charting from one of the foremost authorities in the field

If you're looking for an investment approach that has stood the test of time—during both bull and bear markets—and is easy enough to learn, whether you're an expert or aspiring investor, then Point and Figure Charting, Fourth Edition is the book for you. Filled with in-depth insights and expert advice, this practical guide will help you grow your assets in any market.

In this reliable resource, the world's top point and figure charting expert, Tom Dorsey returns to explain how traders and investors alike can use this classic technique—borne out of the irrefutable laws of supply and demand—to identify and capitalize on market trends.

  • Describes, step-by-step, how to create, maintain, and interpret your own point and figure charts with regard to markets, sectors, and individual securities

  • Explains how to use other indicators, including moving averages, advance-decline lines, and relative strength to augment point and figure analysis

  • Reveals how to use this approach to track and forecast market prices and develop an overall investment strategy

  • Skillfully explains how to use point and figure analysis to evaluate the strength of international markets and rotate exposure from country to country

Today's investment arena is filled with a variety of strategies that never seem to deliver on what they promise. But there is one approach to investment analysis that has proven itself in all types of markets, and it's found right here in Point and Figure Charting, Fourth Edition.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
    1. CHAPTER 1: Introduction
      1. Point and Figure Charting: A Lost Art
      2. Beginning with the Basics
      3. Finding the Safe Harbor
      4. Why Does This Method Make Sense, and Where Did It Originate?
      5. Why You Should Use Point and Figure Charts
      6. In the Beginning
      7. On Taking Risks in Life *
    2. CHAPTER 2: Point and Figure Fundamentals
      1. Basic Tenets of a Point and Figure Chart
      2. Updating a Point and Figure Chart
      3. Practice Chart: ABC Corporation
      4. Mutual Fund Charting
      5. Exchange-Traded Funds
      6. Trend Lines
    3. CHAPTER 3: Chart Patterns
      1. Recording the Battle between Supply and Demand
      2. History Repeats Itself
      3. Increasing Your Odds of Success
      4. Chart Patterns
      5. Are You Color Blind? Flash of Genius
    4. CHAPTER 4: Foundations of Relative Strength
      1. Different Types of Relative Strength
      2. How to Calculate Relative Strength
      3. How to Interpret the RS Chart
      4. Examples of Relative Strength Changes for Stocks versus the Market
      5. Where's the Relative Strength Been or Not Been?
      6. Spotting Positive Divergences
      7. Changes in Relative Strength Column from Long Tails Up or Down
      8. Coming Full Circle with Relative Strength
      9. Examples of Peer Relative Strength Changes for Stocks
      10. Putting It All Together with Technical Attributes
      11. Summary
    5. CHAPTER 5: Advanced Relative Strength Concepts
      1. Sector Relative Strength
      2. Sector Relative Strength Calculation
      3. Sector Relative Strength Interpretation
      4. Examples of Sector Relative Strength Changes
      5. Sector Relative Strength Applied to Exchange-Traded Funds
      6. Sector ETF Relative Strength Calculation and Interpretation
      7. Examples of Sector ETF Relative Strength
      8. Drilling Down: Subsector Relative Strength
      9. Relative Strength Applied to Asset Classes
      10. Using Relative Strength to Determine International Exposure
      11. Got Global? Measuring Overseas versus United States
      12. Where in the World to Be?
      13. Mutual Funds: The Same Relative Strength Tools Apply
      14. The Fund Score
      15. Stock versus Stock Relative Strength
      16. The Pepsi Challenge, Taste Buds Aside
      17. Relative Strength Matrix Concept
      18. DWA Relative Strength Chart Matrix
      19. DWA Sector Seven Index Model Universe and Portfolio Rules
      20. DWA Sector Seven Index Model Historical Testing Information
      21. Stock-to-Stock Matrix
      22. Summary
    6. CHAPTER 6: Primary Market Indicators for Gauging Risk
      1. Do You Have an Operating System?
      2. How the Bullish Percent Concept Developed over Time
      3. Why Use the Bullish Percent versus a Chart of an Index?
      4. Mechanics of the Bullish Percent
      5. NYSE Bullish Percent Risk Levels
      6. Lessons from the Bullish Percent
      7. 1987—The Crash
      8. 1990—Kuwait Invasion
      9. 1994—Stealth Bear Market
      10. 1998—Indexes versus Stocks
      11. 2000—The Two-Sided Market
      12. 9/11/2001
      13. 2002—No Place to Hide
      14. 2003—Who Would Have Guessed?
      15. 2007—The Setup
      16. 2008—A Fateful Year
      17. 2009—Finding a Bottom
      18. 2010–2011
      19. 2012 and Beyond
      20. Bullish Percents around the World
    7. CHAPTER 7: Secondary Market Indicators
      1. Other Equity Indicators
    8. CHAPTER 8: Sector Rotation Tools
      1. Sector Analysis with Bullish Percent Indexes
      2. Electric Utility Bullish Percent
      3. Favored Sector Status
      4. Summary
    1. CHAPTER 9: Fixed-Income Indicators
    2. CHAPTER 10: Utilizing the Exchange-Traded Fund Market
      1. Timing Is Everything
      2. History of Exchange-Traded Funds
      3. Today's Exchange-Traded Fund Market
      4. Exchange-Traded Fund Evaluation: Know What Is Inside
      5. What Does the Future Hold?
    3. CHAPTER 11: Evaluating the Commodity Market for Opportunities *
      1. Futures Contracts
      2. Moving Beyond Trading
      3. Invest in Commodities as an Asset Class
      4. Summary
    4. CHAPTER 12: Trading Options Using Point and Figure
      1. Call Definitions
      2. Put Definitions
      3. Selling Puts—the Underwriter
      4. Puts as Insurance Policies
      5. Rule of Thumb for Deltas
    1. CHAPTER 13: Portfolio Construction and Management
      1. Steps for Constructing an Investment Portfolio
      2. Team Builder
      3. Conclusion
  10. INDEX