Thursday Evening  12 January 2012

 Finding good trade set-ups is not always easy.  It is a matter of sifting through charts and time frames,
looking for a form of synergy.  The Swiss Franc appears to have a great set-up potential.  The Quarterly
chart, not shown, caught our attention.  The 3rd Qtr 2011 dropped from 141.67 to 109.16, 3,250 pips.
The 4th Qtr decline was from a high of 116.82 to 104.74, 1,200 pips, or one-third the previous range size.

 The current 1st Qtr of 2012 is just under way, but there has been almost no downside follow-through
from the above declines.  What makes that significant is where the decline stopped, with shorter ranges.
[Remember, shorter ranges means there is less selling pressure and more buying to prevent price from
extending lower].

 The monthly chart shows greater detail of what was described in the Quarterly.  The monthly bars were
progressively smaller during the decline, as well.  Here is the importance of where price stopped.  Back
in 2008, price peaked at 104.  After a failed swing high in 2009, price traded right at the 104 area,
absorbing sellers for four months before breaking upside on a strong move bar in December 2010.  That
led to the rally to recent highs.

 Interference from central bankers forced the Swiss to realign its currency with the Euro, and price dropped
like a proverbial lead balloon.  Two things began to happen, starting in October, 4th bar from the end.
October's range was considerably smaller, and the net downside low was even smaller.  The same held
for November, 3rd bar from the end... a small range and hardly lower than the October low.  December's
range was smaller yet, and now January.

 The January low is 104.31, 31 pips above the 2008 swing high.  It is only 31 pips, but it leaves spacing,
however small, telling us buyers were willing to enter the market without waiting to see if price would
go lower.  Quarterly charts are slow in developing and less sensitive to overall price movement, but it
managed to hold 31 pips above the 2008 swing high, 31 pips being insignificant in that larger time frame,
much like a flea on an elephant

 The trend in the quarterly chart is up, and the trend is also up in the monthly time frame.  Whenever
price exceed an important swing high, rallies, and then comes back to the original breakout area, [104
in the Swiss], it is one of the BEST buying opportunities!  Bear in mind, we are still in higher time frames,
not used for timing, so what do the lower time frames show?

 The weekly does not show spacing, but you can see how price has been just drifting lower in a labored
manner, since the October 2011 high.  We draw a contrast between two relatively high volume bars.
The first bar, 5th from the end, is the week of 12 December 2011.  It was the low since the 140 area
high.  Volume picked up, the highest in over three months, and the close was just above mid-range.
From that, we can deduce that buyers were stronger than sellers because price stopped going lower,
and the close favored buyer's effort over sellers when sellers are supposed to be in total control.

 Three weeks later, we see another new low, by just 23 pips, and a close on the bottom of the range,
but volume is less than the 12 December week.  We should expect to see lower prices, based on that
bar.  It may yet happen, but right now, price is holding and even staging a small rally.  Sellers had an
opportunity to drive price lower, but they failed and failed at what is becoming an important line in the
sand for support.

  A horizontal line is drawn from the December low.  Price is vascillating below and above that support,
putting price at a "danger point" for buying; it can still fail to hold.  Note how volume has picked up at
these current lows.  We could be seeing weak longs getting stopped out once the December low was
exceeded, maybe even new sellers, but one thing is certain, with the increase in volume, buyers are
showing they are in control.

 The highest volume since late December was Thursday.  Price rallied and closed strongly, telling us
buyers were in control, and all of this is occurring above the 2008 swing high.  The daily chart acts well
at an important support, also showing as support on the weekly, monthly and quarterly, a form of
synergy converging at a focal price area over four different time frames.

 We opted to go long on a 104.80 buy stop, just above the small range rally failure on Tuesday, with a
stop under the lows, and it was triggered during Thursday's session.