Thomas J. Dorsey - Point and Figure Charting

P OINT AND F IGURE C HARTING

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P OINT AND
F IGURE
C HARTING

The Essential Application for
Forecasting and Tracking
Market Prices

F OURTH E DITION

Thomas J. Dorsey

Cover image: Francesco Sapienza
Cover design: Paul McCarthy
Back cover flap image: Kyle LaFerriere

Copyright 1995, 2001, 2007, 2013 by Thomas J. Dorsey. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable (information providers). However, such information has not been verified by Dorsey, Wright & Associates, LLC (DWA) or the information provider and DWA and the information providers make no representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein. DWA and the information provider accept no liability to the recipient whatsoever whether in contract, in tort, for negligence, or otherwise for any direct, indirect, consequential, or special loss of any kind arising out of the use of this document or its contents or of the recipient relying on any such recommendation or information (except insofar as any statutory liability cannot be excluded). Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss. You should consider this strategy's investment objectives, risks, charges and expenses before investing. The examples and information presented do not take into consideration commissions, tax implications, or other transaction costs.

The hypothetical returns of strategies discussed use the returns of other indices. The hypothetical returns have been developed and tested by Dorsey, Wright & Associates (DWA), but have not been verified by any third party and are unaudited. The performance of the strategy was achieved by means of retroactive application of a model designed with hindsight. For the hypothetical strategy, returns do not present actual trading or reflect the impact that material economic and market factors might have had on the advisor's decision-making under actual circumstances. The volatility of the strategy may be different than the volatility of the S&P 500 index. DWA does not endorse the selections or percentages for the model testing which is at the sole discretion of the advisor.

Each investor should carefully consider the investment objectives, risks and expenses of any Exchange-Traded Fund (ETF) prior to investing. Before investing in an ETF investors should obtain and carefully read the relevant prospectus and documents the issuer has filed with the SEC. ETF's may result in the layering of fees as ETF's impose their own advisory and other fees. To obtain more complete information about the product the documents are publicly available for free via EDGAR on the SEC website ( http://www.sec.gov ).

There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities.

The Dorsey Wright SmallCap Technical Leaders Index is calculated by Dow Jones, the marketing name and a licensed trademark of CME Group Index Services LLC (CME Indexes). Dow Jones Indexes is a service mark of Dow Jones Trademark Holdings LLC (Dow Jones).

Products based on the Dorsey Wright SmallCap Technical Leaders IndexSM, are not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of investing in such product(s).

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ISBN 9781118445709 (Cloth)
ISBN 9781118662342 (ebk)
ISBN 9781118799369 (ebk)

ACKNOWLEDGMENTS

It's been 17 years since the first edition of Point and Figure Charting was printed and 26 years since Watson Wright and I walked down Main Street in Richmond, Virginia, to our new quarters to launch Dorsey, Wright & Associates (DWA). Watson and I were together for the better part of 32 years in total, almost as long as I have been married to my wife, Cindy. Watson and I found a way to make 1 + 1 = 3. Our partnership worked well for 25 years. In 2011 Watson decided a 32-year career on Wall Street was enough and he retired. Bravo to you,Watson. May your golf handicap approach zero!