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June 2, 2009

Linear Thinking

I almost exclusively use logarithmic-scale charts when analyzing markets, though I keep a set of linear charts available for the occasional glance. Linear charts will show different resistance points on trend lines, and since many traders only go linear, it's nice to know what they are viewing and thinking. Take a look at the current S&P 500 view in linear format:

s&p 500 daily chart

I post this chart not to suggest a bearish stance, but to solicit opinions about using linear versus logarithmic charts. What is everyone's feel for this? Has anyone had more success with one or the other?


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