I've chosen to use a 4 hour chart here as it fits all the features in nicely. The factors to note are:The trendline from the last few days has broken down. Price gapped up on open to that trendline and dropped straight off it;The RSI trendline from the bullish divergence is providing support and this coincides with the 38.2% Fib. This could signal that this is indeed a correction rather than a final wave down but it's early days yet;The Fib levels to watch are at the 50% and 61.8% levels. These are 146p and 141.5p respectively (note that the 61.8% level also coincides with the low of the drop off 159.5p and was also a key level providing the initial bounce point from the drop off 450p).I would expect that RSI trendline to break as that's what should happen for a wave 2 and it would go in the event...

POG is going along nicely today after a return to the short term trendline. This bodes well for a possible trend change and if it can break through the last high at 142.4p we'll have had consecutive higher lows and higher highs.The next two resistance are shown on the chart but there's also something I missed last time round - look at the doji on the left side of the chart - that had a candle body at the 142.4p level, the same as the previous day's close (give or take 0.1p!). It promptly gapped up from the the following day so these tell us that the market thought that 142.4p was an important level and that's why it acted as resistance a few days ago.I'm kicking myself a bit for having missed that important price action as I could have banked profit there last time but we're nearly back...

Well, sell/short signals don't come much easier than yesterday's and today provided confirmation of the top at 166p, just 1p above the target.The short term uptrend channel provided support at close, but another bearish day tomorrow will give a hat-trick of bear candle patterns: bearish engulfing, three outside down and then three black crows. We'll have to wait and see on the latter (they're not common) but the top of the rise seems clear for now. Really classic trading today and easy money if you could get the position. Original link...

Just a quick update as there's not really a lot to add here. The RSI broke down through the support formed from the 126p low bullish divergence and that confirms the end of the rise to me.Note also how the price high came not at the first bearish divergence, but at the second one. That is quite a common feature of RSI. It can't be 100% relied upon but is does happen often. Original link...

Following on from yesterday's post on the Dow Jones, we can see the impact of a trendline break at the close of play.I've zoomed in here so we can see a close up of those (brown) Fibs showing the possible retracement levels of what I've labelled as a wave 3 up from the 31st Dec low at 12884. Yesterday's low came close to hitting the 23.6% Fib which is the level I'd expect for a wave A of a correction ultimately to the 38.2% Fib which would be about right for a wave 4.In the comments from the previous entry, Gary has highlighted the 161.8% extension of the initial drop (these are the blue Fibs) at 14934 as a possible low for this element of the correction and that coincides very nicely with the 23.6% Fib at 14921. There's also support from a previous breakout level at 14887 nearby so...