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Divergences don't matter...until they do...


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#1 diogenes227

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Posted 20 November 2019 - 12:07 AM

From the link:

 

 

Over and over again, especially in bull markets, prices keep going higher despite divergences on internal indicators, but when a tumble comes, a “pull back”, even a crash and one looks back at its beginning there is usually a divergence there.

 

Or a cluster of divergences.

 

For the cluster and the charts:

 

Divergences don't matter...until they do...


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#2 robo

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Posted 20 November 2019 - 08:26 AM

Yep - lots of small indicators keep showing up that haven't mattered much..... Please pass the popcorn cause I'm not worrying about it. My reason is posted.
 
I posted this earlier in another forum....
 
A HYG sell signal. Will it be a whipsaw or the start of something?  Watching since I'm flat..... HYG is on my chart below,  and is now below its 10 DMA again.  It has been moving sideways for weeks and looks weak.... The reason I track it too Jeff explains below. The warning signals keep adding up, but this market continues to trend higher....  That keeps me flat based on the Risk Reward data... .  This will be day 30 since the daily VXF buy signal, and the VXX sell signal..... A very nice move up....
 
 
Jeff Clark's Market Minute
This Small Loss Could Be a BIG Deal
Published November 20, 2019 - 7:30 AM
Junk bonds had a bad day yesterday.
 
While the S&P 500 continued to levitate near all-time highs, the high-yield bond market got hit with some selling pressure. The iShares iBoxx High Yield Corporate Bond Fund (HYG) dropped 0.36%.
 
Skeptics will scoff at that action. They’ll say HYG is up more than 12% for the year so far. A one-day loss of 0.36% is nothing.
 
But… it could be a big deal.
 

Edited by robo, 20 November 2019 - 08:32 AM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#3 12SPX

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Posted 20 November 2019 - 08:33 AM

Its interesting as I've always kept the belief that December's were pretty safe times in the market to be up but last year proved that wrong so could be another interesting one!  I was shocked to see the market fall so hard on Christmas eve for crying out loud so like you say robo keep it going till your shorts get hit!!



#4 robo

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Posted 20 November 2019 - 08:39 AM

Its interesting as I've always kept the belief that December's were pretty safe times in the market to be up but last year proved that wrong so could be another interesting one!  I was shocked to see the market fall so hard on Christmas eve for crying out loud so like you say robo keep it going till your shorts get hit!!

It's my opinion that you will see some LT investors locking in some gains before this year ends, and some early next year. (12 month LT capital gains)  For now the trend remains up without me.....  I'm now only VST trading both ways. I'm flat at Vanguard until I get the VXX buy signal, even though my system remains on a hold long positions.

 

Good Trading.


Edited by robo, 20 November 2019 - 08:45 AM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#5 blustar

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Posted 20 November 2019 - 10:14 AM

My wave and cycle studies suggest we are strong up into March/April next year with one caveat: the 10/20 week cycle suggests weakness from early Dec to early January, so a basing type bottom with a strong sell-off around Dec 3/4 to Dec 11/12.  My concern on the IT is March/April into June 2020.  Longer term: Sept/Oct 2020 to March 2021 is a huge concern!!

 

The coming weakness should only be in the 6-7% range and should come quickly, with most of it over in 2-3 TD's.  The basing period should be like August 2019, or Dec 3/4 into early January.

 

Tuesday's top suggests to me about 1.4% SPX weakness into week's end and choppy even into early next week's new moon where a base should begin the move up into early Dec.  An MACD/STOCH daily divergent top should occur as I said around Dec 3-4.  A major Bradley is due on the 3rd.



#6 Iblayz

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Posted 20 November 2019 - 11:08 AM

A pullback may be in the cards. It may not be in the cards. However, if there is a pullback from here, in my opinion, it won't be deep (yet), and it will be bought. I feel rather confident in saying that the market will be higher on December 18th than it is now. I have a plethora of upside targets and can make the case for a bunch of them. Based on multiple targets in the range, I would expect a minimum move into the SPX 3192-3206 area. Resistance should be strong there......if, of course, I am right. I would focus on the 3062 area on a pullback here, with 3022.5 likely if the index closes below that price. Just sayin....



#7 12SPX

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Posted 20 November 2019 - 11:12 AM

So true and I think the biggest problem is that even if the market went back to test the break out its only about -3% lol!!  



#8 robo

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Posted 20 November 2019 - 11:23 AM

A pullback may be in the cards. It may not be in the cards. However, if there is a pullback from here, in my opinion, it won't be deep (yet), and it will be bought. I feel rather confident in saying that the market will be higher on December 18th than it is now. I have a plethora of upside targets and can make the case for a bunch of them. Based on multiple targets in the range, I would expect a minimum move into the SPX 3192-3206 area. Resistance should be strong there......if, of course, I am right. I would focus on the 3062 area on a pullback here, with 3022.5 likely if the index closes below that price. Just sayin....

I'm looking for 3000ish SPX, but that's just a guess based on all the current warning indicators. Flat and waiting on a VXX buy signal - "IF" we get one. If not I will just watch this overbought move get more overbought.....

 

Reefer Madness...

 

https://www.youtube....eature=emb_logo

 

 

For now the trend remains up on the daily and weekly data I use.....  Hold long positions, but I'm flat at Vanguard. VST trading both ways in my trading accounts...

 

"IF" we get a pullback we will see if the dippers come in or maybe we get some heavy volume down as investors want to hang on to their 2019 gains.

 

 

Some will remember what happened last year when they BTFD!

 

https://stockcharts....982&a=700998828


Edited by robo, 20 November 2019 - 11:31 AM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#9 12SPX

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Posted 20 November 2019 - 01:04 PM

Oh my now theres a surprise, the trade deal may be off!!!swoon.gif swoon.gif swoon.gif



#10 robo

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Posted 20 November 2019 - 01:09 PM

The 2 hour VXX went to a buy and IWM to a sell, but these signals have been smashed back down since they started - This is NOT QE....  Watching and VST trading some TVIX

 

The VIX hits the upper BB on the 2 hour chart and the smashers come to the rescue.......  On the daily the trend remains up until it's not....

 

Trade small for now......  Trading the 2 hour chart only....  Busting a move it looks like....

 

https://stockcharts....400&a=701482396

 

The daily VXX buy so I will give it a try?  Whipsaw? Possible!


Edited by robo, 20 November 2019 - 01:19 PM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore