in response to the question about divergence from
harshblue on
5 min chart and recycling back to zero, here's a 5 min SPX chart
and example
The MACD pulls back all day as you can see, however the MACD
lines needed to actually cross up and then down to form the
divergence. all day long when MACD was declining was not a
true divergence until it the MACD lines actually crossed to the
upside and then back down to form a little hump, which didn't occur
until the end of the day.
anyway 60 period stochastics stayed above 80% all day as
expected, however as we know, one day is all you get with that, so
I imagine it will dip below 80% in the morning. But in this
QE environment and market uptrend, it may be just a minor
pullback
5 min SPX and divergence explanation
Posted by matt on 5th of Oct 2010 at 04:02 pm
in response to the question about divergence from harshblue on 5 min chart and recycling back to zero, here's a 5 min SPX chart and example
The MACD pulls back all day as you can see, however the MACD lines needed to actually cross up and then down to form the divergence. all day long when MACD was declining was not a true divergence until it the MACD lines actually crossed to the upside and then back down to form a little hump, which didn't occur until the end of the day.
anyway 60 period stochastics stayed above 80% all day as expected, however as we know, one day is all you get with that, so I imagine it will dip below 80% in the morning. But in this QE environment and market uptrend, it may be just a minor pullback
Thanks Matt. But as you said,
Posted by harshblue on 5th of Oct 2010 at 04:14 pm
Thanks Matt.
But as you said, never rely on divergences alone. The market can still gap up tomorrow, right? The 80 on 60 stoch on 5min could act as support.