On Thursday gold staged a bullish ‘outside day.’ In traditional technical analysis, an outside day is traced when the low of the day is lower than the previous day’s low and the high of the day is higher than the previous day’s high. Candlestick or OHLC chart displays make it easy to see.
In the context of where it occurred on the chart, this is a bullish key technical reversal in gold. The chart shows the pattern on gold futures. Silver futures traced a similar pattern. Popular ETFs SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) followed.
As illustrated on the chart, an early morning big decline was triggered by the release of housing and economic data. December Housing Starts came at 954K vs. 889K consensus. This number was extremely bullish for housing and the U. S. economy.
One of my favorite indicators is the Weekly Initial Unemployment Claims. The reason this is our favorite indicator is because it leads most of the other economic indicators and helps us to get ahead of Wall Street. Weekly claims came at 335K vs. 370K consensus. This was much better than expectations and was good news for the stock market and the U. S. employment picture.
As gold fell through the short-term trendline shown on the chart commonly used by active traders, stops hit and exasperated selling…Read more at Forbes
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