GLD Update

This could also effect much of the commodity complex. I was looking at these charts trying to decide if we just saw a 1 day pullback, in which case I'd issue some tight stop trades or whether there's more to go on the bounce that started yesterday as I expected. Here's a way we may find our answer and it's another tool for your box.

Here's GLD.

If you look at today in yellow, we have a very negative candle with almost no lower wick and volume is increasing. This can be a panic sell or it can be a form of capitulation for a bounce higher. Now start from the left of the chart and work to the right. Note all the candles in white have longer lower wicks, some are even hammers, also note they have increased volume and they were reversal candles to the upside. the one in red that wasn't didn't have a very long lower wick. So the probabilities are if GLD rallies into th afternoon, we'll see more upside on the bounce. That should hold for silver and various other commodities showing the same type of behavior today. This is one of the more reliable ways to determine an oversold condition.