A point and figure tour around the world

Sometimes it’s useful to step back and look at the big picture by ignoring the daily or weekly squiggles of the market. One useful technique of filtering out market squiggles is the point and figure (P&F) chart, which StockCharts describes this way:

Point & Figure charts consist of columns of X’s and O’s that represent filtered price movements. X-Columns represent rising prices and O-Columns represent falling prices. Each price box represents a specific value that price must reach to warrant an X or an O. Time is not a factor in P&F charting; these charts evolve as prices move. No movement in price means no change in the P&F chart.

I will be conducting a P&F tour of markets around the world. P&F charts are especially useful to interpret big picture patterns. Measured price objectives can be useful as indications of possible direction, but they have to be taken with a grain of salt.

With that preface, here is the weekly point and figure chart of MSCI All-Country World Index (ACWI) in USD with a 1% box and 3-box reversal. The index is correcting in the context of a recovery from a bear market. The measured price objective of 108.98 is a useful indication of the upside potential of the move.

Let’s continue this P&F tour around the world.

The full post can be found here.