Here red represents trend lines, orange shows past divergences, and pink shows the current divergence in play. What caught my eye is that both major swings in this series have been anticipated by divergence on the Twiggs money flow, confirmed by another divergence on either the stochastic or RSI.
We currently see the strongest divergence setup yet:
1. Divergence signals exists on all three indicators
2. Main indicator (TMF) shows triple divergence
3. Confirming indicator (stochastic) shows a steeper, more convincing classic divergence than it did in the previous confirmation.
4. Confirming indicator (RSI) shows a much steeper and pronounced divergence than it did in the previous confirmation.
Other bullish synergies:
These divergences suggest that the next valley will not be as low as the previous one. The recent inverted hammer signals we may have seen the bottom of this valley, which would be consistent with the divergences. We are also at/near the bottom of both std.dev channels. The TMF looks to have broken and retested the recent bearish trend line, and has consistently failed to cross into red (<-0.05).
Counterarguments:
We are below the emas, all of which point down and the 17ema recently crossed below the 100 and 200ema. However, price action shows the emas are not trending and that we are in a period of capitulation, so this is not a very strong bearish argument.
Trade entry: Go long if current daily closes above the open of the candle to the left of the inverted hammer (small upper wick). For a more conservative entry, wait until price crosses 17ema.
Stoploss: Initially placed below the inverted hammer, as going lower would invalidate it as a reversal candle. It will be adjusted by applying to the major channel the rules here: www.incrediblecharts...viation_channels.php
Profit: Taken via tight trailing stoploss once upper channel line breached, or via a market sell when a reversal near the top of the channel is confirmed.
Edit: mismeasured stoch div. It is a full on triple div, not a 'classic' triple div.
We currently see the strongest divergence setup yet:
1. Divergence signals exists on all three indicators
2. Main indicator (TMF) shows triple divergence
3. Confirming indicator (stochastic) shows a steeper, more convincing classic divergence than it did in the previous confirmation.
4. Confirming indicator (RSI) shows a much steeper and pronounced divergence than it did in the previous confirmation.
Other bullish synergies:
These divergences suggest that the next valley will not be as low as the previous one. The recent inverted hammer signals we may have seen the bottom of this valley, which would be consistent with the divergences. We are also at/near the bottom of both std.dev channels. The TMF looks to have broken and retested the recent bearish trend line, and has consistently failed to cross into red (<-0.05).
Counterarguments:
We are below the emas, all of which point down and the 17ema recently crossed below the 100 and 200ema. However, price action shows the emas are not trending and that we are in a period of capitulation, so this is not a very strong bearish argument.
Trade entry: Go long if current daily closes above the open of the candle to the left of the inverted hammer (small upper wick). For a more conservative entry, wait until price crosses 17ema.
Stoploss: Initially placed below the inverted hammer, as going lower would invalidate it as a reversal candle. It will be adjusted by applying to the major channel the rules here: www.incrediblecharts...viation_channels.php
Profit: Taken via tight trailing stoploss once upper channel line breached, or via a market sell when a reversal near the top of the channel is confirmed.
Edit: mismeasured stoch div. It is a full on triple div, not a 'classic' triple div.
