Brick Chart View of Major Indexes

by: Richard Shaw

Brick charts can make visualizing support, resistance and trends easier to interpret than daily price charts, by filtering out some of the noise in price fluctuations.

The traditional name is “Renko” charts, which was translated into English as “brick”.

Like Point & Figure charts, they are time independent and require the price to move more than a certain amount before a new “brick” (or “box” as it would be called in P&F charts) is plotted.

The charts below use the 10-day Average True Range of the daily closing price as the size of a brick.

Because the charts are time independent and only dependent on quantum price changes, the charts may not change for several time periods.

On these charts, hollow white bricks are upward moves, and red filled bricks are downward moves.

The stock charts below are for:

  • VT — World
  • VEU — World ex US
  • SPY — US large-cap
  • MDY — US mid-cap
  • IWM — US small-cap
  • VGK — Europe
  • EWJ — Japan
  • EEM — Emerging markets
  • EWA — Australia
  • EWC — Canada
  • FXI — China
  • EWZ — Brazil
  • INP — India

MDY and IWM are fully recovered from the January-February reaction low, and have surpassed the January high.

SPY and EWC are fully recovered and are even with their January high bricks.

FXI is in the worst shape being less than 50% recovered (down 10 bricks from its November high, and up 4 bricks from the recent low).

The other symbols are in various intermediate stages of recovery.


Holdings Disclosure:
As of March 10, 2010, we hold SPY, MDY, IWM and EEM in some, but not all managed accounts, We do not have current positions in any other securities discussed in this document in any managed account.

Opinions expressed in this material and our disclosed positions are as of March 10, 2010. Our opinions and positions may change as subsequent conditions vary. We are a fee-only investment advisor, and are compensated only by our clients. We do not sell securities, and do not receive any form of revenue or incentive from any source other than directly from clients. We are not affiliated with any securities dealer, any fund, any fund sponsor or any company issuer of any security. All of our published material is for informational purposes only, and is not personal investment advice to any specific person for any particular purpose. We utilize information sources that we believe to be reliable, but do not warrant the accuracy of those sources or our analysis. Past performance is no guarantee of future performance, and there is no guarantee that any forecast will come to pass. Do not rely solely on this material when making an investment decision. Other factors may be important too. Investment involves risks of loss of capital. Consider seeking professional advice before implementing your portfolio ideas.