"Doesn't the gold chart look like a classical type 3 top from 15 Oct 2010 to Jan 11 2011? Or would you say from Nov 11 2010? If you think it is a type 3 top where would you put the starting and completion dates so that one might feel confident about an exit. I realize that a starting date can only be seen in retrospect."

David Fuller's view For the benefit of those who have yet to attend The Chart Seminar, the Type-3 top sub characteristics are churning, time and size, in a choppy pattern that would almost certainly show more downward than upward dynamics. Gold's pattern (weekly & daily) since either 15th October or 11th November qualifies.

Next, we have to ask: was this the top for the end of gold's bull market cycle, or just a medium-term top within the long-term uptrend?

To be objective, let us agree that it could be either. We should then ask if that top and pullback on gold's weekly chart looks quite different from what we have seen before, or does it resemble another reasonably consistent mean reversion towards the 200-day moving average?

You already know Fullermoney's view and that Eoin and I have been looking for a mean reversion towards the MA for several months. Moreover, the chart characteristics which we all saw in 4Q 2010 enabled us to turn cautious at the right time. This was particularly important for traders of gold futures, ourselves included.

Obviously I think gold is nearing the end of its mean reversion process or I would not have opened a long position today for the first time in several months. If that is correct, sooner rather than later, I would expect to see a sustained surge back above $1350. In that event, the more decisive the action, the more quickly it will convince other observers that the top was no more than a corrective process and consolidation, prior to a resumption of the uptrend.

Conversely, if gold breaks beneath its MA, and then finds resistance from the underside of that medium-term trend mean, which then turns downwards, we will have significant evidence of trend deterioration and the establishment of more than a short-term downtrend.