No change in the bigger picture view in gold as the 3 wave fall from the Feb high at $1007.70 (a-b-c, see numbering on daily chart below), suggests that trade over the last 4 months is a large correction, and with eventual new highs after. Currently, the market is chopping from the Monday test of key support near $925/30 (both a 50% retracement from the April low at $865 and the bullish trendline from last Oct). Though the confidence level that this area will provide an important bottom is not yet that high, it should hold at least temporarily. Looks like a good risk/reward buy area given the limited risk (stop on a close below the 8 month trendline), with potential for $992/00 (both the early June high and the bearish trendline from March 2008), and even above and would buy here (currently at $937). Remember, a good trading opportunity can have a lower confidence level, as long as the risk/reward compensates. Note that even a break below the bullish trendline from Oct would not change the bigger picture, positive outlook, but would suggest further wide consolidating within the $865/$1007.70 range first. Nearby resistance is seen at the nearly 2 week bearish trendline (currently at $945), with a break above potentially triggering an upside acceleration.
Longer term, the market remains firm after the Oct 2008 test of the base of the bullish channel that has contained the market since 1999 (then at $681.00). Though eventual gains back to the March high at $1033.90 and even the ceiling the channel (currently at $1150) is still favored, there is some risk for further wide ranging back to the April low at $865, and even an outside chance for declines as far as the base of the channel first (currently at $725). So for now for the longer term, would wait for a weekly close above the bear trendline from March, or for lower levels over the next few months before having a longer term bullish bias (if not already in place).
