If anyone ever has a doubt about the validity of Fib Extension's - I urge you to take a look at both the Gold Weekly and Daily chart for a start.I decided to take a look at Gold over the last 8 year or so. I took away all the support and resistance level's I had previously and decided to chart Fib extensions running from the low-high from mid 2005 until more recently in Sep 2011 - this is what I saw->   As you can see, there have been two key support area's so far from recent high's. It is absolutely no coincedance that these two levels are consistent with the first 2 Fib retracements. The recent break of the 1300 area would indicate that more low's are to come, with the next area (imo) being the 50% (and the 50% area is commonly referred to as one of the...

Having broken through 147p and 151p in the last few days, it seems to me that there are now 2 very clear possibilities here and they're polar opposites.On the left we have the bull option showing a truncated 5th wave of wave C (the move down from 260p). Factors supporting this view are the higher low, the trendline from 64p and 87p held again, 147p and 151p got taken out easily and the RSI backtested successfully. The other option (shown left) is quite bearish. This has the rise of the last couple of days as a subwave 2 up of the 5th wave down. This would target the 87p level for the low of wave C and that level has, rather controversially, been mooted before. Projections of the last couple of moves do also point to this level. For me, the key test here will be whether the 141p level...

Since RSI has formed part of the discussion today I thought I'd post a chart showing those details (thanks to Gary for pointing out the RSI breakout backtest).The lowest RSI support goes all the way back to June 2007 where it was at its lowest value. Since then the 4.5p low formed a higher high and a bullish divergence. This same RSI support has come into play only twice since: once at the 87p low and just recently at the 126p low.The top RSI resistance comes from the bearish divergence from when the price made a peak of 320p and then the 450p high. Since then it was hit on the rise to 228p showing that that level was a good place to sell/short. There is another RSI resistance above this which comes from the 2009 131p high and the 450p peak but it's off the top of the chart.Finally...

Nice bounce off the intermediate uptrend support today which should form the bottom of wave 4 of the move up from Nov 2012.EWT has a guideline which says that a wave 4 should not go below the low of wave 4 of one lesser degree. That was at 14444 so this fits nicely. The trendline and 38.2% Fib (of the wave 3 move) came into play perfectly. Original link...

This chart is all the more interesting when we also consider the gold chart. What we appear to have is a hammer at the 78.6% Fib and the long term 123p support.In addition, despite the short term uptrend channel breaking down, the RSI uptrend remained intact. Further to that, in my experience, it's exactly this touch on the RSI uptrend formed from the bullish divergence (or bearish divergence in downtrend cases) which usually provides the best entry point.It'll be very interesting to see if this follows through next week after gold hit the medium term target of $1265 on Friday. Original link...