SPDR DOW 30 ETF - Divergence Back at the High vs Russell2000 IWM

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The old market saying that when the Generals (Dow 30) leads the army ( IWM             = Russell 2000), then watch out.

I realize this didn't pan out back in January-February before the big decline into the February lows, but that is what you get with old market sayings. You win some, you lose some.

Define your risk and study it after you exit, then revise if necessary and trade on.



4/8/2014 8:43AM EST
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timwest PRO
2 years ago
The orange line is the IWM - Russell 2000 etf - I should have labeled it.
Kazonomics PRO
2 years ago
Great observation
+1 Reply
vlad.adrian PRO
2 years ago
This goes also with the Nasdaq, so says John Murphy, the author of the TA book. When Nasdaq is weaker than the Dow, down movement is coming.
+1 Reply
timwest PRO vlad.adrian
2 years ago
Right, the generals don't lead the army. It's been a market truism for many decades. John Murphy's books are great reads. We could start a library of recommended reads here at Tradingview to show what people have read and what they recommend. I like that idea.
vlad.adrian PRO timwest
2 years ago
That would be a great idea. I used to search for god books tips on google and the results were horrible. I stumbled on different blogs which bad mouthed different bestsellers, which I later read and enjoyed. Regarding what John Murphy said, it isn't actually from his book, it's something one of his friends said during a webinar. I'm currently reading Gary Smith - How I trade for a living, and there are many wonderful insights about trading, especially index correlation between the Dow/S&P, Nasdaq and Russel, option expiration and so on. For anyone interested in the topic, I regard this book as a must read.
+1 Reply
ZigaZaga PRO timwest
2 years ago
TA book? Is that some trading academy?
Great Idea re a book debate - how about Amazon links?
Has anyone an opinion on this - http://www.amazon.com/Real-World-Trading-Techniques-inside-secrets/dp/B0077E0ZXO ?
+1 Reply
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