16 replies to this topic

[Trend-Signals]

Nice post you got there Sharon. Keep up the good work.
mss

Thanks MSS,

You are best with other posters here.

Good luck with your trades

[maineman]

Trend-Signal... I have a "semantic" question... could you define your use of the word "divergence" in your post? My understanding is that when price is going one way and some technical indicator is going another way, then you have "divergence". What are you calling divergent in the charts above? Thanks, mm

[Trend-Signals]

Trend-Signal...
I have a "semantic" question... could you define your use of the word "divergence" in your post?
My understanding is that when price is going one way and some technical indicator is going another way, then you have "divergence". What are you calling divergent in the charts above?

Thanks,

mm

The standard definition of divergences can be found on many financial websites.

For the charts above. The up thrust of price momentum is showing greater buying force than 7/19 top while the price have not traded above yet; therefore, we can conclude that market has hidden buying force which will likely push price higher - i.e. buying pressure will continue by which price will finally trade above the prior peak.

This is likely because as noted earlier markets were oversold and were coming off from major IT oversold territory.

Good luck with trades






Date:9/13/2007 7:07:19 PM
Post #of 108599

Hi AJ, the basic definition of the positive divergence could be giving you different signals when you focus on different indicators. When you pick different indicators during early stage of market rally, you will find conflicting signals on divergences.

Based on my market analysis, when I highlight positive divergences, it is within the context which I consider and within the indicators which I bring attention to.

Again, I consider other factors when I point out certain Technical readings based on my experience on market calls.

Therefore, the final outcome of the market view is of course continuing to evolve until we know 100% proof of price action confirmation.

Having said that, your market view will support which side you will be on during the time.

[maineman]

Thanks. So the positive divergence refers to the higher high in the CCI without the high in the SPX and others shown?

mm

[securelstmile]

My compliments. Great post. Very well reasoned and very, very informative.

However, I hate a doji when I see one and I think I see three on the charts above, and two of those are on the money charts (QQQQ and SPY). No big deal I suppose... I just hate them, hate them, hate them...

Dojis are the trees, trend signal gave us the whole forest.

Thanks trend, helpful and educational.

[Trend-Signals]

Thanks. So the positive divergence refers to the higher high in the CCI without the high in the SPX and others shown?

mm

Yes, MM

CCI and MACD are making higher peak than the prior peak (7/19) while SPX price action is still trading below it.

Divergence is not trading signal, but it is usually followed by price actions.

The divergence is one of factors contributing to determine future price direction - long or short.

[Trend-Signals]

Dojis are the trees, trend signal gave us the whole forest.

Thanks trend, helpful and educational.

Thanks, securelstmile

Good luck with trades