Gold, more major bottoming in that $1075 area...

Gold near term outlook:
In the Aug 21st email, said that the downside pattern from the Jan high at $1306 was not "complete" (gains from July low seen as wave 4), with eventual declines back to that July low at $1077 and even slightly below (within that very long discussed "ideal" area to form a more major bottom, see longer term below). The market has indeed tuned lower from that day (reached a high at $1168, testing the bearish trendline from Jan), and with declines back to $1077 still favored ahead. Support before there is seen at $1110/13 (62% retracement from $1077). Resistance is seen at the bearish trendline from the Aug 21st high (currently at $1138/41) and that bearish trendline from June (currently at $1160/63). Bottom line : declines back toward that $1070/80 low favored, but likely part of a more major bottoming.

Strategy/position:
Took profit/reversed to short on the Aug 10th buy at $1104, on Aug 25th back below that bear trendline from May (then $1147, closed at $1140 for $36 profit). For now, would use an aggressive stop on a close $3 above that bearish trendline from the Aug 21st high. Though a break above would not abort the view of more basing back toward $1077, it would somewhat lower the likelihood and at a minimum argue more topping first.

Long term outlook:
No change in the very long held view of a potentially major bottoming in that long discussed $1075 area (6-9 months or more), as the market continues to form that huge falling wedge over the last 2 years. These are seen as reversal patterns and suggests an eventual (and likely sharp) upside resolution of the ceiling (currently at $1235/50), while the seasonal chart is higher through the end of the year (see 3rd chart below), with both supporting the view of a more important bottoming. Note too that the $1075 area remains an "ideal" place to form such a low (both the base of the wedge and a 50% retracement from the 1999 low at $252), but as discussed above there is scope for a further period of basing first (see in red on weekly chart/2nd chart below). A final note, these patterns will at time resolve lower. Though not currently favored, a break/close clearly below the base of the pattern would abort this view and be a bigger picture, bearish sign. Bottom line : in process of a major bottoming near that $1075 area (near the base of the 2 year falling wedge), but scope for more extended period of ranging/basing first.

Strategy/position:
Also switched the longer term bias back to the bearish side on Aug 25th at $1140. Will also be looking for further signs/higher confidence of a more major bottom in that $1075 area to reverse. Though the view of a major bottoming argues limited big picture downside, there is always the outside chance of a downside resolution. So would prefer to be in a position of strength (bearish from higher levels) when making that reassessment, versus having to "chase" the market lower if such a downside resolution does occur.

Current:
Nearer term : long Aug 10th at $1104, took profit/reversed to short Aug 25th at $1140 ($36 profit).
Last : short Jun 19 at $1200, took prof Jul 28 above t-line from Jul 17 ($l090, closed $1094, $106 prof).

Longer term: bear bias Aug 25 at $1140, but declines back toward $1075 may be part of major basing.
Last : bearish bias Jun 19th at $1200 to neutral Jul 28th at $1094 ($106 profit).