Lets say for example, someone was analyzing gold. We know the nominal high for gold right now is 1775. How can traders establish what the future current price levels will be for support or resistance if the commodity has not ever been in that price range? I can understand using previous resistance and support as current resistance/support, but I dont understand the method choosing a resistance level for a price that has not yet occurred.
How did Jim Sinclair know Gold was going to bounce off 1764? Look at today's chart.