. --'''MY."'. ....

. ''II . . i1 . > :-� Jtlut.tJ.", ... ,.,-- -

" .. - ='':'' .... ,

lP" WI·' :.:.. --. -... ,V1 __ V .. _... ....

-----.... .-,-,.. ... , -,

.. .. 1M • .. .. ... ..

• CIoorIoo 111 __ ,,001' c." ..... 0 1'" ( • ..... • • ...)

'So.' MOpk muia Httsrps, dB tp their .noM' WI" r,...,... ncR is DO problem iD 1IIiI. Maay ......... 1 PAL'en do It dill _yo Dna ..... _no. Ibal IIIdlM some _ry !p the pm.,. bel.. W. wW DOl look at dIeory .. mucla. Ie dill .x ...... !bal II aboat IUa....... IIoweftr. dill 111l1li DOt ..... lilt ..... doat 'knowi", wbal drives tbe pattero .... belp·. E",,: -II. ,u..- _, • pIUIi<lllM_? ___ , __ i/.,u. _-,.,..dsd .. ' .... _ 1OII1ibd'! (01 COUIft, ,.. cwnlMn iItto • 11M • ...".", . _ 011. I.' ...... ,.., lib, for _AO/IA.fi .. _o/_" .. but, tMtU_ . .... __ .) ( ... ____ _ ....,_ .......... )

1D our ex.rcise. w •• balilook al lb. 59. 52. 51. OR a !!UIdv .... pi_ 0lIl" ...... .... u.ent. SlartiDI aest pap. After aU, If tile de"Y .Is! ., ... IN It .... ,1ft. n. art u I\OI� n ... _ wW be JOnIa& 10 •• Idea .. to Ioow a weekly 59. 52; 5111 MEFR"yl. liDee !be datI)' wiD map 0.' tIIat IIICC'III. We ..... , ....... to .......... Ibll process. also look al _kIy 59. 52. sri lllal art Nt 1Wl' .N . ... IllIIIIIIIea lilt palttros on lbe cIaJIy. wben II II IIRl nccearal. be ... p�1y !be 6JiIICIIIIe to ...... l'1li dall,. palttros? nil is wbal _ wW DOW be Iookln&. at.

There are many successful traders out there. in many disciplinary {or.a". who wait out the d" .. lopment of pa"icular'panerns across a broad spectrum of markets. and Ih.n take them. If you are at all interested in makins money. tben tbis is ce"aiDly one _y to du it. So. llelos leI on \\;th il.

,

1

•

.. .

.'

To __ III �. u ..... U. __ III ___ . ,.. _ beillp .. ... c.n cOllclIIM,.IID. but. flo . . .... � . .. tIw ... is rMCII8nic:8I. TIle """""'" ,..".,... -"IL .. .. ....,." ..., A_ ••• • . ....... "1IIiI . ... PRES\JII:\8LY. pro.-It.

(e.:..,!: .. .. � ...... .. .. ""'_ .... III,.) .'

In your P&L _. Y !Id'''' ................. in tIw faIICIwing _ :

- AdwIad ....... � P&L ...... - EtMlapi theory

o &.u __ _

But. men th8n that. y free carp""'" piNnA.

U ClDDpt VIde. UDIR. u '" CODClptyllly trlintd. (_cMpI.lof�)

But. mont I .... n that.

U Clonet IrId. jf y If! opt mlCb'nel.

E....,...,. is dih.1I. aimp/y __ .... cftinlia rIOt --. ( "'-'P.,� ).-=:- :'.v..' And. thank. goodness! I" ...... ... .. .... ........... __ . " ' .. - .: \ ;.p .. ) . ..•. -.. _.

aecum tile mUhlne u _nt I U decide the machine: not U'llt envilOtI"..tlt !

Pte' •• th. m,cbln'CI' OIlM" ,,_rna I TNn. u .. u're own mecfiI.'

This _. I'" U U8CIIy '- U. do __ .. .'

We discuss: How 10 pick pn ......

Wtry' Becus U lob;' .. the purpo ••. : -.. : _ u C8ft apply to eny _ peIiocI

'.

: monitoring (Ob_, __ ). IIWU UIing __ peIiocI ya/no

All of I�e " yeS/no. (except _. : - _ 'psycllOlogy.p�. ) A 'ye.' or 'no' is tilt! complete /IPIIOIiIe to the other (_ 'P.,cIIoIogy-P_ ) Thus. lhe lower lime penod 'no' .hud be tile /IPIIOIiII to • _._ peIiocI 'yes .........

2,

. . .

•

Awarene" is: not btllng 1S�,p . • to lit ._ks. u haV'I to be c;onsc;loIl5 .10 be c;onsc;lous. u nave 10 c;oralanlly be .blelo ·s .. ·.

'S"in9' in tr.din9 is: .e,lng 'ylS' & 'no' p.ttems on ths lo_r til'll' pe riod. re",.Ung th4I 'truth' ,bout tits hlgh,r time period.

Thys WI like Ihe hjSber lime period & wk'n wilh Ihe Imr fme period.

Th�s, tn. hlghe, time �rifJd", not ",.If, � go ,,"'p, ( see ctlap!, two of 'Psyctlology·Paper' for '$Ieepmo'. )

U stay awake with the yes/no of Ihe lo_r time p.riod.

For our illustration. in �em pic;king .

.... use. _.kly for the hogner lime penocl • d.ily for !he lower tlIM pellOd yeuno

Ones u ha'" completed your sludy. (knowing l!'Ial � ta�es 3 wkS to de'tlltlo�' ,,,bit. 6 mlhS for, !)It.f!f sys'em (lee "Psyenology·P'P'IIr)1. u will h,ve 'book lor your librilry. ind it wil contain P1In�s tn,! wil be Implan'e4 In yout btaif>.msctlll'lf!, for us. on any trrn. period. bac;kecl by tnt tnI,!\eetual centre. ( let alapt.6 of 'Psycho-Paper' )

Tne weekly WIll nave one energy pornl In lI're res .. rc:n eumple. th' _kty 59 .11 by ils,".

� WIth a lead r.ekl. sucn 15 59. WIth a 51 &Ior 52 b,elung rt up. (Thl! weekly 51 �y or may nOl be near 10 I wkjy SSt, but. 511059 is an 'nemy field.)

,ne aally will mOnl\or. Wllh liS yes or no p.luems. as 10 whitiS uppenrng on the _e�ty

Whll do u use on Ihe lower lime penoa 10 awaken with?

: reslslanc;ItISupport breaklr\g as mOVf!S 10 Ihe energy field. Of at it. plOOl pusnes Dr II does nOl

: envelOPe c;ydf! 1I'te0l'Y I"' AecumtOiSIT. P,per )

3

LeI me gM! u an example,

; »,. rllZ...e

I �ld� ,

r'1"2t

0 .",_ , t 1l0'"Zll , �ll0_

J 0

�'IOI"t;! , 0 t"�-.,�"'2�

o l1«l"Gl ""'.,:

,

I "01 ·,6 '101·:'

1.1011·1t " ...... '10i1'O!

'101·"

in Ine Boove U S 9ono$ al tne eno of July 1996 we have on Ine above lell a weeky 59dn, ana laler on we nave a wee�ly 52cn If Inese weekly energy (relas are valid rf!$lstance Inen Ine Cally 'Mil snow 'yes' paHems The aally 'yes' paHems wud reveal aaily resIstance holding, ce II 59an's 520n's SIan's 61an'sl 10 Inctuae tnu 'ulenSlOns') llhl-zones noldlng 10 mdupe cycle Inecry from Ine 'Envelope cyde eonceol' f see AccumiDIW, Paper) There u have ": yes'

4

Now, ters lock at a daily 'no' �am, 10 reveal sarna for a _kly nel(j

""0:1) • , .,,, ..

�'''''OJ .,12·,.

• '"G"X --..

I u�

. ��

I. r'ot .. <,.-

• _,0'7"" '1G<"Zl ,tcJ-e..I

-,.".

PATTERN

In tIM!! above U.S Bon(jS, 1996. at al)Ove left. we have IWO weekly 52 ups breaking II they

tire .... , tlM!!n Ine Gaily wil � nave a 'yes' panem. wit" IUjlylUppot1l101ding, lUily pIdoI driving up . • nd .n"'l0� 'down cycle' $(OppHl9. Ina .$ho"""'5l sl9fIl 01 IccumuLlltiot!. In Ih' above. 1M (jaity revealS a 'no' �nenr Cl';ty 5Ull!)On. such as 52"$<.1", 59 up and their levels �aking. Thos IS Clue 10 INNI\" 'MIal dnv., ,rena nJns" How can aady suppen tlreak unlen da-.y ptdo\

IS anv",g oown" Daily pklO! dnve, down If tn'$ con"nuu, Inen Claily envel� bonom will snow sIgns of poor accumulatIon., the daily down cyd. remams strong. with litlle accurnulatll:)f'I up off daily envelool! ool1om ConcluslDrI: daily reveals a 'no' pal1em by daily

,uopon oreaklng as goes towarCls weekly 52up, and breaks at_ekly 52up. driv'n by weekly picot WlII"I cally l"Iav,l"I9 diffIculty complellng a cn cyde. Wltn potenttal for daily c-wav. down. and dilly 1110-zones wiH not be exoreulng much energy

We make no mention here of the con,eptu.1 aspect TM daily was shOWIng mechanical sl9ns ,n.1 11M!! weekly 52', up were oreaklllS Tn.s mechanical centre wud alen Ihe Intellectual centre. tnal a drunken cnver was comIng doWl'! the road, I'" ..... "e O, .... ..,.P\e·P ... r: The Intellectual assessment IS Inl1 the wltly ptdo' IS dnvlng down. & pldot' dnvft IlIftlVY. and daily reSI"allCl! IS located thereat alld hold"'9 u .......... . ""'" "' •• " ..... "' """" ,..,....,nco , .... , _,. _" ........... to .. """'" b .... "" n ...... "'."'." """" fil." .. 5".

5

go '0 your resean:h.

eumple: build I bOOk library of mtI�nieal panems. of ......... ' heppens wtth dai� yes lnod no on. !of example; a rigl'tt nur �ty. 59,51.52.11.e1, pldots!stalk and live)

I::J in Ihl Spice be�n I _kty SO ! the leld field ), plus 52 &lor 51 , a __ � 59 &lor 1,-Zone, a weekty 61 IS I lead foeld. plus 159.51.52. 11-zonl (&lor)

o any Olher ;.ometric 'combinatiOn u wi$h .

• Scomlthlno .1 .. u In! ,101n9 10 han 10 chlek out:: conc.pfu.l/y spe.kJng. whar is th.!!

abom Heh /'ne tit,! 1& Impol'Uar' ( .... .. _ . .. .... _ ...... , c ...... _no ""' ................ u_ ,

o 59: alwlys therl o 52: conven�on.l line - everyone �ehes o 51: a 'Jo.idtef' line. per plans 1.2.3 of "ctvanc:ad Manual . tor backup up to o\her lines. a 11's: everyone wMehl$llIem: _ refine into the 'zone' concept. o 6,'s: as lhey cMveiop, _ know lhat corqeSlion is coming 01 here, "nd once in. it cMfltlH o pldot drives lnergy and trend runs.

AlsO: create ill Iit/rllry of WHJo.� WI1h daily yeSJno for: I � ·K ....... o w ..... .... f .... ,or .. C_"'II '10M' IIIJW)

: dofted lint biOd; Ire.

: congestion elCit.

'lin 6 mlhl ( maybe 3, m'ybe 3 wks if becums a habil ).

the mec:lulmcalnen wiU be yours.

21 Ihln wI1en.., trade. il will be mlcnanlClI & thin al Inillima. & only Inen u eooceptualize.

'NIl,,1 dO I mun') I mean, !h"1 w/l,1I u rf!de. u wilt /I.ve quick m.c/l.lllc.1 ,,",.,nct ro I parrlm //llll ewsts. Illd due 10 your researeh. hU • am,in p!�nlage of suecen. "nd you Qualify Ihls. oy lhen derermllllf19 eoncePfually """r 1$ drivin9 ttl" pattern, be if pIdot. Of oth!r fields from Ine nlgner rime penodl. ro inclUde tha kind of trading on the pltrem. and why if $nud UI�I and wh,r tne flUI kllld of Indlllg will be, ,nd verii)' ume as you .et. with ye5h!o

from your Plnem hb,.'Y ottilie lower Irme penod: u will SN why this patficuJlr oceurelfCe' wilt Iik,ly De i 'yors', ,nd aVOId it if, '/10'. knowmg you will be .ble ro verify urn. With lower tim, penod yes/flO If will either wor1< Dr" w;1I flor & you /snow m' "Cllm, for "ch.

6

. .

Caution: ., U '[J building y'" "bAN, do not sonclpty'''", When dOing u're research. do not try to think of why the pattem is holding or brellldng. U Wlnt II record, not the re.,on, why! Later, if u wish. u can summarize why, but. do not rnemonze them. since the constant shifting of trme period energy, will rMke your library too immense and complicated. forcing constant use of the intellect centre in trading, which will slow u down. (see 'Psycho­Paper') Just record the yes and no panems: do not think why.

When it is all said and done, u will then. when u trade:

o mechanicallze y're approach • ".hh!" that's a weekly S9down.' Daily IS Showing a yes PlIttem. �

Cl then conceptualize . ahh !". no wonder that weekly 590n IS holding! It is at a weekly pldOf .. " hmmm, .. pldots drive trend runs,. and we are in weekly congestion action.,. weekly congestion exd to downside commg up? Great. Wonder what the weekly target will be ... mthly S9up?""" hmm. wonder_whit the weekly pattem will be down ;n there .. where's my research panem book? "

and ID proper balance for trading:

Intellectual

o mecnanical is In control o Intellect IS on standby o emotional redundant o Instinct on standby

Mechanical

I see ,n'IOIIY Ir"! en.D! 6 ·Psye"o,P.p�r rt G"YI1"I1l I

Emotion" Instinct

After you have made the mechanical ness a habit. I taltes J will lor a haM. 6 mtrls lor , tlebe'syllem I. U Will then find u'reself automatically. applYing It to any two time periods.

• long term major positioning trading . monthly pattem - weekly yeSlno • swmglng around shon term weekly patterns - daily yeSlno • more active tradlDg: daily pattems - hour1y yes/no, or 30mln yesJno • very achve Intraday trading hour1y pattems - 15min yes/no

1\ aoesn'l matter The pattem research IS applicable give any two time periods.

7

For your research, I recommend:

: weekly analysis : minimum of five years of data , better ten : verify lhat the pattern exists on any weekly commodity or stock : note which patterns have the highest percentage of success

- with success patterns, u can note when they worX. ( conceptualize), but. restrict note takmg

: do nOI conceptualize 8S basic research is being done. -

do not use 'perpetual' contracts. Use .dual trading centrad data.

: realIZe 1hat u are asleep. & cannot focus for more than a couple of minutes:slick to the task. : every so often. abruptly stop, to re-energize thru 'random arousal' ! ... -PI.,cno-Pao.r,

: impliment in u're mind that u are dOing a necessary JOb

- giving at least one month 10 accomplish the task : do nol review until u are finished.

Please nole: u're patterns are your own. They belong to no one else. You belong to Ihe 'School of P&L',:no commercial representation outside the

school . P&L belongs to no one else. and to the school.

Now. that u know aboU1 the mechanicalness of tile. get a 6fe, and be the machine u want. U will find that even u're JOYs will grow! The negabVeness of 61e. will be left in the dust. and so will mankind. & u Will awaken from u're sleep. & u will find u're body responding with good h.alth, to inClude mind and SPint

I cannot guarantee that U will hear new ideas. Ideas u never heard before, from the start: but.

if u are patient. u will very soon begin to notice them, And. then I wish u not to miss them, and try not to Interpret them In the old way

The chans to follow are baSIC studies as examples. with some comments. of what IS involved

In a pattern picking research library. ( O.UU not •. tl'lat ml 'In ... 100e conuot' � not Incl\lo.d nlll" ooru: In Oro.,

10 lO'ct \I 10 Inm. ," ttlm' ,omDry 01 llIftOry .ltn •• nolOlroli or rllealilng .. na the OIdO! PUlr"I' The conceot 01 \lIng trIe en ... 1001 cvcle conce0110' tUM"t. monlto""g '$ your cnOCt 'Ut ·P&L ACc\lmula!KlnlOlStnbllllOn- & .. nocql.o wntmlll on "I\ow' r.: �"Wt'ODt ConceOI • >gno.t '1lI'tIagi' )

One OBoe 22 . nore an example of actual written comments made by Drummond him$elf. poor 10 a trading day ThiS i/Justrales first ;rem: paNem. then conceptualizino what is driving rnat partem and what it means. to Include likely target. & what to look for when there. This is

wnat u may find u',eself domg. on a daily baSIS. to set up the mechanical foCUS. and then see

what IS dnvmg it thru B conceptual baSIS Drummond does this first thing in the moming. when the mind IS fresh. He often makes notes at end of day, but. they are usually ridden with

conceotual holes & madequacles, The mtellectual centre works best. when it has not been

workmg to, a while overworked, it can slow u down' that is its job! -.I" "P.lycho-PaH"·

8

Successful WHklv 59dn • Com

Apr

, . . c..." .,�

Iii: t"' ..

r'· 111= r�, t ie:: " •

, ; toe'

• as u can see, price moved sIightl�' over tbe wkly 59dn. Note tbe dally: dl�' 51dn. tben Ubi was holding, just over the wkl�' 59dn. The only way this dly resistant< can break, is if dally pldot continues 10 push up. This means. u bang tight with u're sbort. jllSt over wkJy 59dn. keeping eye on dally pldot, in case it drives prier over dally resistance. at which point u wud be lOne. What resistanee? ", dly

51dn. Uhi's. Ir this dly resistance holds. then the weekl�' 59dn is valid. Target for the shon position?: • > observe daily support at wkly pldot, and if signs of accum. take place. then lire the short.

Successful WHklv 59dn . S&PSOO

.. tlty $IIdn

, . .

-llS,DO

115.DO

105,00 J ...... 1_--,,0,,'::'.::" ,.::o�_ · ...... "

, . • here we have a wkJy S9dn. that holds almost 10 the tick. Note dally 59dn bolding, "hich would be the first sign of distribution.,,, that at that point. the dail)' Slldn 'level" is valid, for wkl)' S9dn. Target for sbort?: • notice . .daily support hold ina: at weekly plelot" u cud have lifted the short. Notice that eventually, daily support broke at wid,. pldot." well. so be it. if interested in raking oaly

profits from the �Itase of wkl�' S9dn. (please refer to tbe 'paper': .. Pt-edidiDg weekly bi�bs aad lows". ror su�estions as to wh�' Obe millbt assume that weekJy pldOI would brak. for

reasons to hold the short off wkly 59dD. )

Successful Week" 59dn . T.B<lndl

...

\- • UIWHl • .,

9

. wkl�' S9dn at wkly pldot. An ene",izod wkly 59dn , due to wkly pJdot? If 50, then expect daily resistance to distribute sufficiently to break daily pklot. Tarttt"!:­weekJ�' suppon. or if u wish. coftSadtr theory that creates wkly highs and loWS .

Successful Weekly 59y2• livr Clule

.• �

1" . 1:$1.00

:u.tO

• pl'i« mOIla a Iitlloe down thru wkl�' 59up. but. DOIke thai daily suppon is tbe� and is holdin,. and dally pldol does nOI dri"'� dOlll·n. theredler. Tarael�: wld�' pklol. or whal u michl del�rmine whe� Ih� willy Rsistan« lay.

Successful Wttkl,· 59yp . S"."js.s Fun�

- -

°flt ,Ir::

. . '11•1;. I 1'1::: 1'!"lil !.i,"'·' . I' -

. " , .. .m.

• wkly 59up bas daih' in bounce. bounct. bounce. Nott dally .!i9dn right al wl.:J�· pldoc. tbe pouibloe t:uJrt. deJKndi� 00 wlteR u a.numt wHkly highs will place .

• herr we have wkly S9up enugiud by wkl�' pldolS. ( We do nOI discus.s much Ihw!")' io chili study. but. Iheo!")' wltd place tht tnel"lY or the wkl)' ·l·J pldolS ball' to thai wkl�' .!i9up). At any rale. dail�' Slup under wkl�' 59up Is there and holds ... also nOlice Ihe Slttpntu or Ihe daily Slup ... that IIHpne$$ can orten denote trnnination or enellt�· ( CMory "lain:) Tar&rt�: ir wkly 59up enrl"lil:ed by wkl,· pldolS. ( l·J ball •.

che likely !oc:alion Dr wkly block anal. ctten "'kl�' pldot ..... iII nOl drive down. Ihus IafJel cud bf projecled wkl�' rtSistan«.

10

Failure of W •• kl,' 59dn - CnrD

,­

_s"", I II 312-' r ,'"., J,- �� � I 0 (:�:: • e:ti -375"0

Mar

• guess what causes the wkJ�' 59dn to fail?: - the wkly pldot_ the dly pldot. Notice. as wkJy 59dn bn:aks. that dail�' resistance at wkJy 59dn starts to break ... the dail�' 52dn. and then its 'level'. starts to provide support_ and th.n dail)' pldot locates at wkJ�' 59dn. and drives price thru wkJy 59dn. Notice also. the dail�' 59dn 'level', just over the wkl�- S9dn: it was holding, but. also nOle the pressure put on it. by the daily pldot: this is the

alert that wkJy 59dn and daily 59dn level is breaking, and you are ready to get out or the short. (Can u get long, once u senn the breakdown? Yes� u can, •• simpl�' get long and hide behind dail�' pldol. since ir wkl�' 59dn breaking. then daily pldot will do the job,)

Failure f W kl 59 0 •• " u� . S&P5(JO - �P .. ....w�u", rl-l J ... ,oo

i ,,,.,, -wo.oo • ·130.00 WrUryl51i1up

r" 64A.�0 - ·120.00 .' -

, - � --- ' -

Jh&' -... -...

" ""m 0 ;... .. •

rll .. f-..

� • •

Failure of Week'" 59.p - T.Bonds

'"

pldo15,

on. ......... ..

'110'"30 f t07·16

'1G4'"22

rh . , rlt ' , --" �ti::: a •

11

• here we have the wkly S9up breaking, bit by bU. Note the daily 59up breaking, as moved towards the wkJ�' 59up. Daily support was breaking as moved towards wkly 59up •. the first alert that wkJy 5Yup ma�' be breaking. Then. note how dail�' pldot does the job or pushing thru wkl)' 59.p

,

· at wkl�' S9up. a daily S2up locates thereat. and breaks. Note the dai1�' pldot push, Note also that dail�' pldot was driven b�' wkJ�' pldol: this can be a deadl�' candidatt: ror wkJ�- support. daily support, If buying the daily 52up, ho,,' do u handle it ? Stop out going thru ext. of daily S2up? So, far. we are seeing a reasonabl�' constant theme as to how wk1�' energy breaks: daily energy breaks at wkJ�- t:nergl. dri .... en b�' daily and weekJ�'

oncomio& quick mOH orr all thost 52fSl·s.

Failure or W«kI,· 59up - SwiS§ Fr ,

.... �

.• -,

•• .��

� .. , .. o t r "�O'O

llil ' m·,

, .

"I: .. , . . .-

t' th� . ' -. ' II -

',.,,-

II"·' I'�!' :: ,r·.

... Ir h' " ....

• wkJ,· 59up breaks. !liott that gotS to the ..uttnSioll or wkJy S9up and then rtll"SCI!S 10 wkJy pklOI. ( u aN: Iookiaf: .1 ytt ..... ther "�nt. for patknl-pick.iQjt .. ibe eDt"'" of en. of .. kly 59) !liole. thai dan,· 5Jup al wkJy S9up brelks dllt to the CIICI'I" of daily pldol. Daily 1110 bruks on clem. At fl(t. or wkly S9up, not .. III the dln�' 52fSt's up. This combination of 52.'51'5 is always an alcn to me of I possiblt

• wldy 59up breaks. as dlil,· Juppon brtaks as "Berg}" moves towlnlS the wkl,' S9up. Daily support bruks around the wkJy 59up. In tbis example. we have th .. dail" pldol pashill&:. but. 1101 btin& touehecl'; Ihis denotes high encl"J)'. which will continue or will bt In �.xhau5t. d .. pending on daily suppon existin& or holding.

· wkJ�' 59dn breaks. as wkl�' pldot ene�iud bJ' d;;aily suppon. drivel' on up. ..u move into wkJ�' 59dn. dail�' resistance such as dh' 52dn is breaking. and finally the dail�' pldot moves into the wkly 59dn. and auns both wkly and daily S9dn to bruk. How do u handle this. dpr;ciall,· when u 5« daily resistance holdln,� WEll. u are ;ilen. ,ince the resistance was nOI ausing dail,· congel'tion entrance. as

dail, pldol moved closer ;;and dO$er 10 wldy 59dn. and wkly 59dn cud nOI even ause a clO$t under d;;ail�' pklot: Ihis gives a senst thai wkh 59dn is breaking. 50 go kine orr dail, pklol. and hide behind samt. or Mdt behind dail,· suppon. if ItOt too rar away. ( Drummond purel'S inlr"llda,· suppon for guidance. I

12

Successful WHkh' 5240 . CO{O

, -- , -_,¥�Ur. tn', - I ,31" •

, 0 14U-'

0 1311-.. j 0 ,

'''1"' :"'." � •

Successful WHkh' 52"p - S&P500

.. ... �...... • - .. ... <> - , . ;-;:�:luP ImJO t . t· , til .... · ii'" ,1,-:1 t i ,�::: h ::: I " ••

·11'-'101' _ • _. -- I

Successful Wukh 5240 - I.s..nds

_ we got some eoergy rrom thai wkI� S24n. 10 at I�asillo to the w.!':I�· pldol Ih� foUowing wHk. Daily S2's do we� holding on c105C" al wklf 52do. aod finaU� a daily Sldn caughl IhC" �ncl"1:'·' A.I Ihe wkl�' pldol tht foUowing wuk. Ibe dail,· S9up was localed. ( bt,... u b.·� �el aDolber pal1o:1""11 10 pidr.: dail�' cOU)O" al .. kJ�· pldol: lie iD ,",�od ... Id� bil:ti aDd Io� ba.od 011 u....,I") .. 10 110lt the possible "alidil�' of dail�' Qltrgy II wkJy pldol.}

• wkly 52up (plu5 61up- aooliter paHem 10 pi<:k�). becomes valid. ( nOle thai i5 also the nt. of wkh' 59up). And. at wkh' , ' S2up. u hu'c daily S9up localtd the-tul. and this has enough tocr:�' 10 cause the dail�' pklol 10 btu". (If was 001. Ihtn whal wud u be sensing� )

_ ... " . ,

IG""" ." .... ....., ,' "'''' I . . . ... ,. " .. "

--- • .0'1.:1\' 524n cncl'i:iud by 2·) pldots hak. & likd�' localion of wkly block a�a I tht� gotS thai thto�· again! ) And. Iocaltd at wid)' 5240. Wt find dally 59dn. Target�; ... dl. if u take Ihto�' into account. u a5$e5S ... hal sort of challenge ma�' ocCUC" to wkly dotte-d lint. to sec ir wkl�' pldol mar break. ( IheOI)·.)

- •

13

Successful W .. kh 52dn . L.Cattle

u_

''''JIO ,,11.00 51.00 -55.00

u _ ....

• wkJy 51dn in area of wkl�' block area. thus be alert to daily resistance. Dail�' 52's do were holding, and then dail�' 59dn Iocaud just over the wkly 52<1n. and this had enough energ), to create daily congestion entrance. Target?:- will wkJy pldot break? What ir daily support was locating at wkly pldol and boldiDg� in spite of aDY analysis u may do which wud suggest price ma�' go to wkJy dotted line? Daily will nOI go to

wkJ�' dotted line. if daily support is holding at wkJy pldol, and also showing signs of accumulation thereat.

Successful W .. kh· S2u •. Swjss.Er P--.....

16 fit!)

'.1700 (_1$00 '.1300

� wkly s2upt against the trend. and daily constantly closing up as moved towards it. tbus showing signs of accumulation as moves towards wkly S2up. Dail)' arrives at daily S9up 'level'. plus energy of daily S2up, whicb has enough energy to creatc daily congestion entrance. which u wud want in order to put u off an)' alert that wkJy S2up was breaking.

Successful W.ek"· 52up . Snvh.ans

,�-

pldot. a good suggcsled wkly targct. I

• here we have a wkJ)' S2up in the area of a wkJy 59up 'level'. which cud be an interesting pattern-pick. Daily support, such as daily 59up were breaking as moved towards wkly 51kup, but. daily suppon located at wkly s2up held, and had enough energy to cause daily congestion entrancet which is what u want in order to take u off tbe alert tbal wkJ)' S2up was breaking. Target?: � in this case. we have wkl)' s9dn at wkly

ext. or dail�' S9dn holds in that area. )

14

Failure of Week'" 52dn- Corn

, 1 ___ -.,, __ -'· 412 .. '

M." " "

Failure of Week'" 52dn- S& P500

'"

r670.00 esO.DO 4.630.00 -610.00

SP� .....

Failure of Week" 52up- T,Bonds

us_ ..... us_o .... Wt't'ktv �2UD ,"�A20 'r'b: J � 110�O8

I ·112"'6 r .,. 0,

.",Al'I

·',o-n l4 1"09"'2 tti-�' -106"011 ,--

Ap, • •

both located in almost the same area.

15

• wkly pldot is pushing up. and wkh 52dn breaks. as daily pldot moves into wkly 52dn, nen though dail�' resistance was

bolding previousl�·. Dail�' had lhrtt tries

off the wkJy 52dn, and cud Dot get congestion entrance. which wud � an alen that wk.J�' 52dn was breaking. If

cbasing long, off daily pldot. then doing so, hiding behind dail�.' pldol. with target being wkJy resistance. ( mth�· energy anyone:

)

• wkly pldot is driving up, which ir continues, then wkJy resistance deemed to break. at which point. u are alen to an�· daily resistanct starting to break. going

into wkly 52dn ( nott daily 52dn breaking), and daily rtsistance will break at wkl�' 52dn. and daily pldol will do the job. In this case. priCts does not gel close

10 dai1�· pldot. dtnoting high energ�·.

- wkly 52up brtaks. as wkly pldot drivts energ)' orr wkl)' 61dn. & 2-3 pldolS b.k on the wkJ�·. Dail)' 52up breaks as comes off wkJ)' 61dn. and daily pldol dots the job or pushing energy thru daiJ)· 59up. Th�r)' in this case, wud suggtsl that since wkJ)· cannol obtain congestion entrance. thai wldy pldol is weak, thus daily 59up at wkJy pldot may not be \'alid .. in other words. wkJy pldol was

dril'ing down right into the dail)" 59up,

Failure of Weekh- 52up- L_ Cattle u ......... ....

W"-fy521o.C1

.0

� notice how thr w�kly bar starts to close under tbe weekly S2up. Then it goes to the ext. or wk.J�· Slup, & SlOpS. As it ""as passing down thru the wkJy Slup, u wud be wondering if u have an imrncnSt trend run down on your hands. Well. no run down until daily suppon breaks at wkly S2up to its extension. and dail�' pldot continues to drive down. until dail�' resistance locates in area of wkly S2up to

its extension. at which time. and if dail�' resistance continues to hold in area of wkJy S2up to its txt .. that wkJy Sklup to its ext. is confirmed resistance. < < Plus!" rev�'" paper: " KnowiQg wben the c-rv is comiD(1: rrom." > > Notice the dail�' pldot drive down. thru wkJy S2up. with daily support breaking. until lands at dl�' 59up at ext. wkly S2up. and then closes over dail�' pldot. signalling that wk.J�· lows are likely in,

Failure of Weekl,- 52up- Swiss Fr_

, Sf .. ....... . --. so -.0..,. , _ I Wftkly 52uP

'.1500 '''350 ' 11 ; : " �i '.1100 - rii ... " f ·1tOO 1 -:-..,-, ----::_ --'

r . l,.- 'rl _ I, "* li I� If: - : -

••

resistance breaking. due 10 it. < < tbMr;.· dnes help: > >

Failure of Weeki, 52dn- S",-hean,

- in [his case. prices goes to ext. wkl�' 52up, due to daily pldot push. then lands in tons of dail�' 52151 's up. and gets caught in daily 52up at ext. wkl�' 52up� and achieves dail�' congestion entrance. In this case. wkJy S2up area eventually breaks. Ho,,' ?:. by dail�' resistance locating at wkJ�' pldot and wk�' pldol drives on down. (compare to L.Cattle above •. wherein. dail�' pldot pushes right on up thru wkJ�' pldot. with daily

. in this case. we once again. have breakdown of wkly 52dn. due to dail)' pldot push. until lands even past the ext. of wk.J�· 52dn, with daily 59dn as daily resistance. having enough energy to create daily congestion entrance. as well it will, as long as it holds. which thereby energizes the wkJ)- 52dn_ If the wkJy 52dn has the energ)", then daily resisunce will hold thereat. and if holds forever. then will

16

force wkJy coagestion eatrance.

Successful W .. k" SId. - Corn

, -- , -

u "

tbe eDrl"R�' is commit (rom. ,. > >

Successful Week" Slup - S·&P5IKI

..

I. a

-------------�� " =

Successful Week" Sldn - T.Bond,

• daily resistance such as dly 52's dn. 59's dn, ext. 61's dR.,. holding at wkl�' 5Idn. with wkJy 52dn hovering over wkJy 5Idn,,, ( the combo or 52 plus 51 can be

inter6ting). Target?: wkJ�' pl1ot'? What wud be the 5uHested raDg� ror the ensuing wks, as they unrold? (tbeo�' is required) Also, t�· to J'evie,,' and think. or how tbe daily gelS thru the "'kly pldot. < < plase rev" the 'paper': M Kaowmg _ben

- here we have the weekJy 51 up capturing the wkly· pldot as support. How is the daily behaving during all this? What is daily pldot doing?

• success is eas�'1 isn't it? Quite consistent. Dail�' resistance holds. daily pldot drives down . and that is that. The real issue is when something is unsuccessrul: how do u deal with that':' By knowing its patterns'?

17

. .. - ,- . .. - -

WHtdy51 .. t'12"" C! 110"" 1"''''

iJAl tt1O"OO 1'''''' :'01"" 11.""

'" -

. , . I i I

..j ''''''JD

Iii rlll�'·-". r:: • "

. Daily S2d. at wldy SId •. tbe. daily llhi·

Successful Weekly SId • . L.Cattle

rA ,It: t fa 1".>0 v lto.$O

... M • •

�c __

. . - . - . .. --� . .

zn moves into place� so what can u do but short? '" since obvious distribution taking place, and do so, assuming will at least get daily congestion entrance. Target?:. wkl�' pldol. and maybe this will be a true target. since is wkly pldot crest. < < there 1l0e5 tut theo�' sturr 2laill: > >

Successful Week'" 51up. Sw;ss.Fr

..

, . .. -.......

WHtry�1up C! 11.&& '.usa

.-

. I rHht::: •• • I I I. , . -I·'!it�· ::

-,,----_. "" ••

Successful Week'" SId. ·Sovhean, . _- .-

18

• obvious signs of accumulation the two preceeding wks to the wkJ}' Slup. as closed up orr wkl�' S9up level. thus wud be a�rt to an�' signs of accumulation on the dail�', or the placement of an�' daily S9up. S2ups, Slsups. at wkly Slup. Target?:- wkly pldot crut or pldot ?

- wkl�' 52dn had held on close. the wk . berore the wkJy 5ldn. so there were signs or distribution. thus dail�' 59'sdn. 52's dn. 61's dn ( including their extensions). wud be interesting 35 a shon. assuming that daily will result at minimum in a ravourable close. down orr daily resistance. off wkly Sldn. to signal distribution taking place. Target?:- wkJy

2-3 pldolS bal • • or wkJ�' 59up at 2-3 pldots bak? < < tb� rombo nr 59 i..b area nr 2·J pldnu bak. ts y�t anotb�r ·�tU:l"1I.pick' that is or iat�rtit. > >

Failure of W .. kh SIdn- Com

,��

--",:c, ----

• a good spot for a failure of a Sidn. is al the beginning of a ne"'" trend run. up off

pldol crests. since the new enercy is

supposed to break resistance against the pldol crest! which represents energy

starting in a new direction. < < tb�re JOH that theory stun a,aiD! > > In this case. we have both a wkJy S2dn & SIdn at the same localion. which rtp�ents highly, fint--tuned energ�·. So.

ho,", is this supposed to break. on the daily? \Vith dail�' resistance breaking as goes tOVo'ards or into wkly Sidn. and then dail�' support, to include dail�' pldol push. at wkl� SIdn. making the wkly SIdn into a S3up'?

Failure of W .. kh· SIdn- S&PSOO

WUkly �1an Q 62U10

620.00

, 614.00 ! ______ J601. 00

whal entrgy will come from that wkl� how wud it u n fold '?

Failure of \\'" lel>' Sl up- T . Bood,

- here we have a wk1�' SIdn. that breaks

as dail�' S9dn breaks. as daily pldot pushes up thru wkJ�' Sidn. only to arrive at likely upside target of wkl�' S9dn. to result al end of week. with the wkl�' SIdn holding on close. The wkJ�' bar is not

o,'er until it is over. Thus. if chasing long. the dail�' close over wkly Sidn. over dail�' S9dn. u wud have to be aware that u were mO"ing into wkJ�' resistance at

wkJ�' S9dn. and the question wud be: � S9dn'? .. sufficient to re-activate the wkl�' SIdn &

- wkly pIon! ]s d r IVing down off J wkly rldol crest. so a caution wud be placed on the wkly S l up . .J.nd hesidc:s. we have a wkly 59dn at wkly pldol for wkly pJdOl cres!.

t h u s he: Jkn t ("l d a i l y pldol d r iVing down t h r u the wkly S l u p .

19

, . . "' -.",-

., ..... , .....

Ii::: - --.::-7,---"',.

- once again. we have the issue or a wk.J�· 51 up against a wkJy pldot crest. This continues to bring up the topic. as to tbe

Failure of Wttkh· Slup· L. Cattl<

...... I.u.

• • •

likelihood of line 59.52. 51 railing or being successrul. which brings rorth the concept of theo�'! ( which is nOl the basis or tbis prueotation- Ro'Wn1er, theory shu.d t:1'ftlU G predictive fonn.tU. ) At any rate. how is the w.oy Slup to break? With daily resistance holding over it. and dail�' pldot starting to push down?

Failure of W .. kl>· Sldn. Swiss fro

l'�fl' l ::: V .. 13>.

" alSO --:,cc •• :-----:: .... cc, -,-.,-----" -...

Failure of WeekI> Sldn· Sovbe.ns

, --

...

20

- Here we have a wkJ�' Sldn breaking. that went with the (nnd ruo down. It was due to what? Daily suppon. such as resistance breaking and becoming suppot1 - see 'A'. and dail�' pldot push? , and off wkl�' pldot?

- here we have- a wkl�' Sldn against the trend. a De"" trend . off wkJy pldol crest, with dail�' picking up the wkly pldot. via its support. and then pldot push .

, .. -

So. there we ba.e iL Pauemsexist that reveal the relus< of IOJe Weeki>' S9, 52. 51 "

coer:y. And, wt know the dtJiJy patUT7IS of hoM.' thest ""uJdy lintS fail.

We abo. kDo,,'! that we bave some idea as to whetber the W'eekJ�' line will be successful or nDL. IIITIl tht use of thcor)" &: we can assess the like'" patterns that will unfold. and we kIIoYt' what they shud be. due to this th,ory.

It is suggested. thaI one can do ver)' well. financiall�'. with a rusonably minimal mental strain. b�' 'pattern-picking' across a spectrum of let's sa):', ten commodities or stocks: out or the ten . • bert; like'" will be a few Weeki,' 59. 52. S1 '5, and we know how the�' art successful and hoYt· the�' fail. Drummond also suggests that theft lines M tted to the five kinds of lnlding.

On the neX1 page. will be an example. of Drummond Pauern.Picking.

Ibtl' tJ whit Drummond do" .Ieb momina. He nakel wntten notes as to oanem. ano .!Mn conceptl:Jr.lul rt. On �ptI b.How. ·second bar from tM ngt'n C _ I. IS dIIy prececbng that of acIion. Notes ,,",ould be rn1IOe pnor to last bar snown: aaiO" day. To fo�. are actUIIl notes mace. U _ _ ..... � ..,.. •. -.n _n � 10 II, & � OruIfaonotICI .... ........ , .. ac:n . .....,;II _ cornlNC&wo T".l _ I'IDI nece&Mry, 1rI ,.,.. ___ tt'I. �n. "N1'e� • onlY til ...,.. � ..... , Ina D'� corlClcnua .. aon AW �r HoIO .. '1"CWn on "..,.,1, II'� .acqnlt'na ne_ to OnMunono. To -.c..O .. �.'. NU;. IMNI. er'Ian DaMm. ana UftO_

e1Jr.c.n .GIDl:ln •• lie ..,. ... 1 UMory • 11""""9 Ine DaMm, IS. .1 !!'\II IS. ..... 0". anee OGeW nOI _I'IDIO m. _'"'ct�1 c:emrt These ilre,JlIy_�rt�!':!: ( ,�'tl"KOwmen. lyIt .. t\enrrt for eIIlt'll'V) - ...wI1 be alert todly, In botxll, 10 cycitn9 "ell: rrnoly �i!tc at th.t a/y Sbl. "fll .. �.m� smce IS enefVlZed "Ed: c.non''' ••• lInllDr. � ;;;1 ..;ty pif.At. (Of .. "kIy 5Pdn. c Eel: rr oly 'U.aMC. 'ion. o"".n oy Illy CltClot mtn

, -- - -_. -= ===

' . '; -.-- • . " 1Du.-G..., . ..::: .'._ s.. •

. • "")"C. I

.i11' .....

=�t. ... " . '

.,. I, t: \, � i � · -

" " - ;: -. , . - - -, • �i

i " ;!I ii � , .. � .-I

•

.-EXAMPLE OF PRIVATE CONC EPTUALIZATION OF PATTERN PICKING

I . "- -'j

.... ". �90n IS In,,\�n�t� GOln9 likely 10 wkly pldol . . . If holds on Close. then likely hS\Ie 101 of dry 52's up. our/ding. so oe aWfT to dly 6 1's:1D wtllcn "WOld o� arrven Oy wkly plOOf . . . kf!H!p �ye on dJy plOOf. <eo. "Yonll

_ . . _ .. _._--- _ ... . _- - --.-- --Now ' notice In thiS how ' go: firsl oanem: Ilalry 59IJnl �iClOt. ( rnech.nica.l ) !!!!n. wnat ttlls

oanem means 10 the wr./y 59dn .. noting '."Ie nave oalty 1)IClot IOv�!VecI, ;)ne pldots CliTVe energy, Iconceptuall.. thus, the dly OInd IOtraoav ',Yltl sAY....:i.e�� fI...Q. I I dally IS yes. tnen mtl"30ay will have ves panerns

Now ttllS exerCise. If aone !Jalty before m ... "1 ooens. ana pemaos aven wntten �down". cud do some gOOd' slOce deftnl!S tne yes ur no .. , ar.o wtlh (Ime, the conceptualaatlOfJ \vjll be mech.nlc.'aed. ana oone more SWlnty: likely WUd take 3 wits . SJn�. 0 .... 3 .... KI. tG,4 • ....-a . saar;. If �:are an adVanced P&L·er. 1hen u have soen1 montns CleveloDlng the Dellel system of P&L. conceptualiution.

U tMn sWlnlv app"" bOtn

22