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Why did it turn when it did?


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#1 gm_general

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Posted 04 February 2018 - 12:51 PM

I have been studying trends in MACD, they show up a lot of times in certain patterns, particularly megaphone patterns, or the inverse. Usually these start in one direction, and then when this is broke, the opposite takes place. So convergence is followed by divergence, or vice versa. I also notice there is usually no clean break between the two, but there is a transition where both trends overlap. Contacting the trend line, particularly in an overbought or oversold condition often indicates turns with great accuracy. Note also there are shorter trends within the larger trends, but I will not look at that here.

 

So with that said, I present the trends in the SP500. There was a convergent trend from the 2009 bottom into about 2014. Then a divergent trend occurred which we are in now. So you will notice the MACD hit that upper trend line at the recent market turn point. I would not have imagined it could get up that high to reach that resistance line again, but it sure did.

 

 



#2 dougie

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Posted 04 February 2018 - 04:42 PM

i notice that hitting the upper trendline produces a reaction to at least the zero line



#3 gm_general

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Posted 05 February 2018 - 04:12 PM

i notice that hitting the upper trendline produces a reaction to at least the zero line

 

Thanks for the observation - it seems it won't be long at this rate.



#4 dougie

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Posted 05 February 2018 - 10:18 PM

thank you for the nice chart: it might be useful in the future.

Would be something to see a trip to the Lower TL but i sincerely doubt it



#5 gm_general

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Posted 06 February 2018 - 11:38 AM

I would say it is a certainty, but when is the question. I miss the quick action of late 2015 - early 2016, waiting years for one of these signals is like watching fingernails grow.



#6 dougie

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Posted 06 February 2018 - 12:16 PM

Yes right you are