文档介绍：MARKET DYNAMICS
LEARNLearn Relative RELATIVE Strength STRENGTH point and figure POINT charting & FIGURE
CHARTING
Copyright by W. Clay Allen CFA
W. Clay Allen CFA Page 1 1/22/2003
The Spirit of Technical Analysis
In my opinion the Market Dynamics version of technical analysis is a tool for
judging long-term trends and the reversals of direction of those trends.
It is not a tool for prediction.
It has certain rules but it is more or less an art form – I certainly don’t believe
it is scientific.
It helps in a majority of cases (65% to 75% estimate by WCA) and fails in
others or at least the trends quickly change direction from what was hoped
for!
If I can correctly gauge the direction of the long-term trend I will be able to
advise and manage my portfolios essfully.
If Market Dynamics is used with discipline - it will require the sale of losers
and the retention of winners as long as they are able to perform. That, after
all, is the key to essful portfolio management.
WCA
W. Clay Allen CFA Page 2 1/22/2003
Chart construction and layout
Ratio chart – price relative to S&P 500
The years are always
shown at the top line
on the chart
This is a long-term relative strength chart on
CSCO. It covers almost four years of RS
history. Relative strength is calculated by
dividing the price of the stock by a major
market index – . the S&P 500. The ratio is
then multiplied by a scaling factor (.
1000). The P&F chart is plotted according to
the rules pioneered by Chartcraft Inc. of
Larchmont, New York. The daily highs and
lows are used in the calculation of relative
strength.
Since the chart is a plot of ratios - the movement relative to the market is what is
being recorded. The ratios don’t mean anything in and of themselves. The
letters along the Y-axis and the numerals along the X-axis are to be used only as