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John Boggio wrote:
Although I do not currently have an opinion on the Dollar, I can say that
Gold is looking a little better. I have attached a 60 min Point and Figure
chart of the XAU. Box size is 1.5 and the reversal size is 3. As you can
see, we had a "Triple top buy signal" issued yesterday. This same
formation can also be seen on the daily chart of the XAU. Further notice
the rising bottoms, this suggests that selling pressure is subsiding.
Finally, based on P&F statistics, a "triple top buy signal" is profitable
87.9% of the time, with an average gain of 28.7% in the next 6.8 month.
These stats can be found in Tom Dorsey's book, "Point and Figure Charting"
Some comments:
1 These stats were also published by Cohen in 1968.
2 Kaufman refers to work done by Robert Davis on 1100 stocks over 1954-64
published in "Profit & Probability" in 1965. The ascending triple top was
the most profitable.
And questions:
1 Who did the original research for these stats which now seem to have
become folklore ?
2 Is anyone aware of published hard evidence of P&F pattern probabilities ?
3 Is there anyone out there actively using P&F as a primary trading tool ?
Graham Critchley
Box 330
South Melbourne VIC 3205
AUSTRALIA
Phone 0416 171 006
Intl Ph 61 416 171 006
E-Mail gcc@xxxxxxxxxxxxxx
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