Point & Figure charting issues

[aereoplain]

Hello,

I'm wondering what is the current status on eSignal's development of "true" Point & Figure charts. eSignal's PnF charts do NOT add new marks each time price crosses a full figure price change intraday. For example, let's say I want to see a 1 point PnF of a $20 stock. The stock moves up from $20 to $22 during a particular day, then comes back down to close at $20 (let's assume the low is also $20). No matter which option I choose for eSignal's PnF, the $22 price will not register on the PnF chart. This is what we should see for that day:

25
24
23
22    X
21    XX
20    XX

But on eSignal, there is no way to see this correct configuration for this day.

Is eSignal working on this problem? I saw some discussion here from several months ago which indicated that eSignal may look to correct the PnF format. But I haven't heard or seen any more recent discussion. I hope something is in the works for the next eSignal upgrade.

Thanks,
Jason

[DuaneG]

Hi Aereoplain,

The reason the P&F charts are not capturing the high range values is due to the fact that it is drawing the X's and O's based on the closing value. Much like a line chart that builds off of closing values, when a stock goes from $20 to $22 and then closes at $20, the high of $22 is not charted. You may want to try setting your P&F chart to a one minute interval as the chart will have the opportunity to use a shorter time frame close to catch the high and closing values at $22.

[aereoplain]

Duane,

Thanks for the response. I tried using a 1 minute chart, but unfortunately it still doesn't print a correct chart. I was looking at QQQ, 1 min, 1 pt box, 1 pt reversal, closing price. I noticed a few problems:

1. On 5/25/04, the eSignal PnF shows a low of 34 for the second-to-last mark on the chart. But a candle chart shows the actual low as 34.949. The PnF should not have made a mark down to 34 until it hit 34.00. The chart shows X's and O's vacillating from 34-36 over and over ever since 4/29/04. But if you look at a daily bar chart, you'll see that the lowest the price got during this period was 34.11. So none of these columns and columns of marks down to 34 should be on the PnF chart. And price only moved up through 36 once during that time (without going back all the way to 35.00), even though you see many X's going up to 36. The eSignal PnF appears to be making a mark upward to 36 every time the price moves up to 36.00, but it's then making a mark down to 35 every time the price moves down to 35.99. If the price goes 35.99 - 36.03 - 35.97 - 36.02 - etc., then you get all these X's and O's straight across like the QQQ chart shows. Instead, only when it moves up to 36.00 should you make a mark up to 36. Then you don't make another mark until it hits either 35.00 or 37.00.

2. Many of the columns show only one X or one O. There should never be only one mark in any column. The only time you move over to the next column is if there is already a mark in the current column at the price you're going to mark. For example, if the price goes 34 - 35 - 36 - 35 - 34, the first 3 marks (for 34, 35, 36) would all be in the first column, but when price goes back down to 35, you already have a mark in the first column for 35, so you move over to the next column and mark the last two numbers (35, 34).

3. Dialing down to a 1 minute chart will allow you to catch more of the highs and lows correctly but you still won't catch all of them. It's really not acceptable to just catch most of the full figure changes. It needs to capture all of the full figure price movements to be a valid chart.

Reading over this, I realize that my use of the term "incorrect" may not be appropriate. Perhaps eSignal's PnF's accurately follow some particular technique, but it's not one I've seen elsewhere. If this is the case, then my question becomes: does eSignal plan to offer the form of PnF charts I'm talking about? I learned PnF charting from the work of Richard Wyckoff -- I believe Hutson's book "Charting the Stock Market - The Wyckoff Method" may describe the technique. I've noticed that Stockcharts.com appears to use the same technique, and I've heard that Bullseye Broker does too. But I'd love for my eSignal to draw PnF charts this way!

Thanks,
Jason