The Drummond Geometry Forum

Yesterday's action (Mon 12 Sept) on EU and SF left me quite baffled. I think the Y and its HTPs are working on cong entr down, but at the end of last Friday, even if W res moved to WET I would not have expected such a move down now, given the poor down flow of the previous week. I was expecting a stronger block on the daily at least for the time being, not such an acceleration.

In my view this is the drawback of P&L: it lacks an explicit timing tool, it is more qualitative than quantitative in assessing markey behaviour, although its potential is outstanding in general.

Would you please share your view on currencies and on my comment?

C.M.

I look at the FOREX version of the currencies, and so these charts may be the inverse of what you are looking at if you are trading the CME contracts.

First, the Swissie.

On the long-term Forex chart attached, certainly can see the yearly exhaust in 2003, nearby support holding 2004, with upside target of yearly PL dot -live dot at a minimum. That has been achieved. Quarterly exhaust Q4 2004 supports this clearly, and the q's 2-3, in 2005 give credence to the idea of a stronger upside move, along the lines of your thought of congestion entrance to be achieved during the rest of 2005. However we do see some slight reaction to Y pldot in q 3 so far, witnessed by the close off the highs. Still, that concept of cong entrance is still possible. Qly dot will have to hold, and LTP'S energies continue up, of course. Note that 2.5 year chart also shows pldot refresh in progress, and that it has not yet achieved this target for either static or live dot.

On the daily/weekly Swiss Forex chart note red arrow and cyan line on the daily. There was no indication that this upward move would stop, or slow; on the contrary the upward flow was strong on the three days preceding this very strong upward breaking day, and the pl dots were not swinging off line, and the slope of the pldot line/ mail channel was strongly up. I can understand that you might have thought that the daily would stop when it hit the weekly pldot but there was no sign of this happening on the chart. On the weekly/monthly chart (pink circle) we see that the market was coming up out of monthly support, indeed an exhaust, and so the target was at least the monthly pldot/live dot, which was another clue that there might be more upside potential here.

On the Euro..., Long-term chart... Again a Forex chart... Of course not enough data on the young euro for a 2.5 year chart but on the yearly we see the expected pldot refresh accomplishes and now the open question is congestion entrance or pldot holding? Quarterly chart shows an exhaust down (lower arrow and resulting anticipated pldot refresh (to live dot) having already occurred and so... Question is if support will hold, or not, on this current bar (likely since close to end of quarter) or not. Or if we look towards next year's support. Block levels 2-3- dots back is a looong way down.

Euro daily weekly... A very similar situation where you had daily approaching weekly pldot but with no sign of slowing occurring in that approach, instead the Pldot slope (maim channel) was strong resistance, dots push to the downside strongly for the days preceeding the bigger move and no hint that this would stop, and weekly pldot providing big-time resistance and push down once broken. And not surprising since was also fueled by monthly pldot refresh in progress.

As to the question of P&L and timing.... Well, since we can't get inside the mind of every trader in the world we can never know exactly what will happen when, but it is possible to line up the probabilities and watch for the actions to initiate and gather speed, and thus be aboard when it happens, and we can also see characertistic reflections of the majority thinking in the formations of exhaust, dot push, etc.

Anyway that's how I look at it....