Hello David. I am leaning more to that this should be seen as a Buying Climax, and not a UpThrust, before Reaccumulation. With the 1.3275 area as final support before moving higher would be my guess. The bottom range area from 1.2875 to 1.3040 looks like a relatively longer time Accumulation area with rising bottoms which might also suggest a relatively bigger "cause" and that the up move is therefore not finished yet. At least I think we would have a retest of higher prices. Note that I do not know how to use Point and Figure charts yet, so the latter regarding "cause" (and "effect") would only be from my previous experience and personal judgement.

I took the liberty to reuse one of your charts for illustration and hope you do not mind. The ST, secondary test, in the illustration I see as not going higher because of previous strong resistance back on January 4th with the UpThrust and back.

Laurus

Hi David, sorry offtopic but I cannot PM yet

Do you still use market profile in your analysis of the markets? I want to start with price and volume as my guides to the market and was reading through your CL MP thread and thought it looked useful.

Laurus,

Thanks for commenting and you can reuse my charts anytime.

I was concerned that I may be way off on this one. :-) So the indications you put on your mark-up such as PSY and ST etc., are those then part of a new accumulation in a trading range, or is it part of a distribution? Or is there a distribution and then a reaccumulation? Can you point out areas on the chart that would help me to determine if its distribution or accum? Also, wasn't the daily a weak close with lighter volume. Does this come into play for you or not?

Thanks,

David

David, i thought you might like to read about this article:

Sam Seiden discusses the logic behind the length of time price may spend at a particular level:
Lessons from the Pros - 12/29/2010 Issue - Featured Article: Supply, Demand and Time

P.S. i don't know about you but when Sam speaks about trading it seems so logical and practical. I like this person's ideas.

Thank you David

The thing about distribution vs. reaccumulation is that we usually do not know from the patterns in the beginning, because they are usually the same. The first thing I noticed when price dropped from 1.3453 was the three wave movement on lower volume down to what I labeled as AR, which I perceived as a part of a correction.

Regarding the lower volume on Daily I saw this as a result from a ending/weaker up move to 1.3453 and then the following corrective down moves on lower volume on lower time frames. Both which is coherent with the beginning of reaccumulation/correctional move, but as stated above we usually never know in the beginning. We have to see or wait until higher volume with or against the previous larger move comes in. Regarding the early three wave correctional pattern mentioned and the higher volume showing towards ST, I thought the volume was at the wrong time and without the right patterns and levels to be final for a larger move in either direction.

Thanks,
Laurus

Edit: For convenience adding picture discussed, correcting text.

Laurus,

Do you still see 6E going higher. Seems to be having a tough time around 1.3500, but I can't tell if its absorbing or not.

David