9 replies to this topic

[johngeorge]

QQQQ Negative divergences on every indicator



NASI Lower low with lower highs. Negative divergences on indicators with 9 day ema crossover.

[arbman]

What is the prime difference between an ending consolidation and a beginning downtrend? Just asking...

[johngeorge]

What is the prime difference between an ending consolidation and a beginning downtrend? Just asking...

Good question and I dont have an answer for you............However, to me it depends on where the market is coming from. After the recent rally with negative divergences indicate a downtrend to begin, not an ending consolidation for another move up. I will also add here that the seasonals for the market this time of the year are not favorable. And I have been wrong before

[relax]

well negative divergences don't really indicate a downtrend, just indicate that the trend is weakening

a true downtrend is when we get markets are going down without divergences

next week will be big and decide whether we break these negative divergences and continue the uptrend or if we start some sort of correction, which then may turn into a downtrend

What is the prime difference between an ending consolidation and a beginning downtrend? Just asking...

Good question and I dont have an answer for you............However, to me it depends on where the market is coming from. After the recent rally with negative divergences indicate a downtrend to begin, not an ending consolidation for another move up. I will also add here that the seasonals for the market this time of the year are not favorable. And I have been wrong before

[skott]

I think if you go back and look at the rally from the July lows until Feb you will see negative divergences thru that whole move. stayed overbought the whole time. btw, up 22 of the last 25 on the dow? that's the best since 1929!

[jjc]

Ask any day trader if it is a good idea to trade divergences on a strong trend day and they will tell you "it's a good way to get run over". This market is breaking a lot historic patterns on its way up (plenty of up-fuel), and it is trending strongly; I'm not sure mean reversion is the ideal trading strategy at this time.

[jmicou]

QQQQ Negative divergences on every indicator



NASI Lower low with lower highs. Negative divergences on indicators with 9 day ema crossover.

Put the COMPQ behind the NASI on your chart, then study the lead/lag time, as well as divergences. For the Qs, use the NDX and NDX Volume McClellans.

When looking at other indicators for divergences, also take into account lead/lag.

[johngeorge]

I think if you go back and look at the rally from the July lows until Feb you will see negative divergences thru that whole move. stayed overbought the whole time. btw, up 22 of the last 25 on the dow? that's the best since 1929!

DIA is as you say. Beautiful double bottom last summer and up it went despite being overbought, but of course, finally corrected in March of this year. Now the Dow is the stronger index than IWM or QQQQ which is a warning sign in and of itself. Generals leading the troops and all that. So I am looking for a correction in the Q's to begin soon perhaps after next weeks meeting. However, in the longer term (late this year or early next year) I believe we have higher to go in the Q's as technology makes a comeback. Meanwhile with what looks to me to be a strengthening dollar and the "sell in May and go away" crowd we pull back in the Q's to fib 32.8% ~ $42 or fib 50% ~ $41 retracement of present rally from July.

QQQQ Negative divergences on every indicator



NASI Lower low with lower highs. Negative divergences on indicators with 9 day ema crossover.

Put the COMPQ behind the NASI on your chart, then study the lead/lag time, as well as divergences. For the Qs, use the NDX and NDX Volume McClellans.

When looking at other indicators for divergences, also take into account lead/lag.

Thank you and I'll heed that advice.

[jmicou]

I think if you go back and look at the rally from the July lows until Feb you will see negative divergences thru that whole move. stayed overbought the whole time. btw, up 22 of the last 25 on the dow? that's the best since 1929!

DIA is as you say. Beautiful double bottom last summer and up it went despite being overbought, but of course, finally corrected in March of this year. Now the Dow is the stronger index than IWM or QQQQ which is a warning sign in and of itself. Generals leading the troops and all that. So I am looking for a correction in the Q's to begin soon perhaps after next weeks meeting. However, in the longer term (late this year or early next year) I believe we have higher to go in the Q's as technology makes a comeback. Meanwhile with what looks to me to be a strengthening dollar and the "sell in May and go away" crowd we pull back in the Q's to fib 32.8% ~ $42 or fib 50% ~ $41 retracement of present rally from July.

QQQQ Negative divergences on every indicator



NASI Lower low with lower highs. Negative divergences on indicators with 9 day ema crossover.

Put the COMPQ behind the NASI on your chart, then study the lead/lag time, as well as divergences. For the Qs, use the NDX and NDX Volume McClellans.

When looking at other indicators for divergences, also take into account lead/lag.

Thank you and I'll heed that advice.

You may also want to read Sullivan's remarks on May 1st.

[johngeorge]

You may also want to read Sullivan's remarks on May 1st.

Thanks for the link, good informative read.