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2006issue C051-3

Constructing bearish point-and-figure support breaks

A bearish point-and-figure signal is assembled in sequence: classify how support is retested, name the column that prints through that box, and convert the width of the preceding congestion into a downside objective.

  • On a point-and-figure grid, repeated failed selloffs at one support box remain a bottom-retest structure until a later column prints through that box.
  • A triple-low is two declines that stop at the same support and a third that prints below it. A spread-triple-low delays that break after a failed third selloff and a brief recovery.
  • A descending-triple-low lowers each new low by one box, and a declining support line can extend that construction across more than three columns.
  • After a consolidation-to-impulse sequence, the horizontal-count turns the number of consolidation columns into a vertical price objective from the breakout price.
Entries in this reading3 entries
Current trackPoint and figure chart37 readingsDouble top and bottom68 readingsBreakout confirmation172 readings

A bearish signal starts with the grid

Point-and-figure is a non-time grid that records directional X and O columns on a fixed box size so repeated tests of a price level stay visible. A box is the minimum price increment required to plot a new X or O on the grid.

Editorial construction sequence: classify how support is retested, name the column that actually breaks it, and convert the width of the preceding congestion into a falsifiable downside objective.

Classify how support is retested

The bearish form of a double-top-bottom on this grid is a repeated test of the same low. Repeated failed selloffs at one support box form that bottom-retest structure.

The retest becomes a breakout signal only when a later column prints through that box. Until that print, the construction is still a defended support level, not a downside signal.

Name the column that breaks support

A breakout is the first column that prints through a previously defended support or trend line and turns the setup into a downside signal.

A triple-low is constructed from two consecutive declines that stop at the same support, then a third decline that prints below that support. In that construction, the named breaking column is the third decline.

One sterling/dollar construction held a six-box range from 1.4690 to 1.4740 until the third support attack broke 1.4690.

Delayed and descending support attacks

A spread-triple-low is constructed when the third consecutive selloff fails to break support, a brief recovery follows, and a later decline then breaks the same level. The named breaking column is that later decline, not the failed third selloff.

A descending-triple-low is constructed when each new selloff makes a lower low by one box and the third slide accelerates.

One descending-triple construction printed consecutive lower lows at 120.00 and 119.80, then a third low 20 pips lower at 119.60 before the break.

When more than three columns are involved

A downward break of a declining support line extends the descending-triple construction by using more than three declining columns before the line gives way. The named breakout is still the first column that prints through that line.

A downward break of rising bullish support is framed as a construction that leaves remaining longs on the wrong side after an unexpected reversal.

Turn congestion width into a downside objective

After a consolidation-to-impulse sequence, the horizontal-count converts the number of consolidation columns into a vertical price objective measured from the breakout price.

The projection takes the width of a consolidation, in columns, and plots that same distance vertically from the breakout box.

One euro/sterling horizontal-count construction used a consolidation width of 12 and projected a downside move of the same 12-box distance.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
23 of 30 in the Point and figure chart track
20081-3 pp.Next on Point and figure chartPoint-and-figure forex breakouts and trianglesPoint-and-figure charts plot price alone and omit volume, elapsed time, and open or close markers, so they can follow a continuous currency stream without a broker-assigned daily session.
All readings on this track · 30 readings
  1. 1988Constructing trend definitions with filters and lines
  2. 1989Reversal count as the clock on point-and-figure charts
  3. 1989Point-and-figure setup and session-average entry windows
  4. 1989Two-scale point-and-figure trendlines and stop placement
  5. 1989Adjusted net asset value, tighter reversals, and written stops on a fund point-and-figure chart
  6. 1990Stack option odds after point-and-figure signals
  7. 1991Constructing a point-and-figure downtrend-break
  8. 1991Constructing point-and-figure box and reversal charts
  9. 1991Constructing a close-tested one-two ladder on a point-and-figure chart
  10. 1992Point-and-figure, breadth, and volume as falsifiable hypotheses
  11. 1992Three-gate stock selection with ranks and point and figure
  12. 1993Constructing combined stochastics and point-and-figure relative strength
  13. 1997Point-and-figure box scale and reversal construction
  14. 2000Cotton weekly point-and-figure: late-stage decline, named weekly close
  15. 2000Constructing point-and-figure charts for support, resistance, and breakouts
  16. 2001Swiss franc: seasonal permission and a weekly point-and-figure breakout
  17. 2001Constructing point-and-figure boxes and reversals
  18. 2002Point-and-figure construction: box, live column, and three-box reversal
  19. 2003E-mini point-and-figure box-size and a descending-triangle breakout
  20. 2003A reconstruction critique of point-and-figure daytrading
  21. 2004Point-and-figure column moving-average crossovers
  22. 2005Box-series transforms for trend and channel work
  23. 2006Constructing bearish point-and-figure support breaks
  24. 2008Point-and-figure forex breakouts and triangles
  25. 2012From tactile charts to written trade rules
  26. 2013Combine a Point and figure chart and Moving-average crossover inside one System optimization procedure
  27. 2015Point-and-figure time and volume limits are conventions to test
  28. 2016Measurement-first critique of indicator defaults
  29. 2017Point-and-figure construction, reversals, and column-based overlays
  30. 2019A 2019 charting case as a three-check trend classroom
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