PRICE vs MOMENTUM forming a compression divergence. Notice the lower indicator and the trend on both sides. Price has been broadening the last few years while momentum/strength has been compressing. This is a hidden bull diverging into a massive bear divergence with the potential for a 3x touch here soon. Hidden divergences are historically weaker than regular divergences so the odds are in the bear's favor. We'll just have to see which one the CB's are rooting for.
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This is the dow futures- I find a little more accuracy when charting futures
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NYSE composite index showing similar bearish overhead
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On this renko chart, I have another warning signal that could trigger.. pivotal moment here where the market will break down or up hard soon based on whether this scenario plays out. Can you look at this chart and see what I see?
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I'm watching this put/call ratio on s&p There is certainly a chance that prices turn down here and we should see that reflected here in the p:c ratio by this average going up quickly. This would make sense to happen in this zone:
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es1! 60 min candles
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This is concerning.. We're potentially on the brink here. However, these are weekly candles.. we could creep through December with no changes until January but something could also happen suddenly.. yikes.
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heads up- I see the potential for a quick drop here. It's possible a short term top was put in.. I'm not sure if the major pivot top was hit yet.. I doubt that. I'll share this chart but it may not make any sense to you. I have some of my own indicators on there that will probably confuse you
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hmm. is that it? I was hoping for a little higher. Dow did touch 30k so that's interesting.
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nasdaq, yeah this looks healthy.. Too many new people piling in the market 'buying the dip'... What's the matter, you don't see a dip? Of course there's a dip..
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We're below the apex of this wedge.. this is resistance and this rally could be a sucker's rally. I'm expecting and hoping for more downside. Too much new money buying every little dip.. just feels like people are about to get flushed. I can be wrong but I know how this game often works
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my target was tagged. Now it's about to get VERY interesting. Price can collapse or it can break upward. This is a massive bear divergence but I don't have confirmation. This week and this month are so important to knowing price direction
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I wanted to point this out on the daily chart. This is critical.. If price respects this divergence, this could signal that weekly bear divergence as well. It's in the confirmation zone. These divergences can also break with price going right through them.. I'm ready for that too
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splitting hairs here!
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Critical week! Take note of the arrow. We need to see a red candle and a lot of volatility to convince me that the bear will win. If price breaks above and we print a green weekly, it could be ridiculously bullish. My preference is a bearish move with a nice correction over the next month or two. But what I want is irrelevant. I must try to interpret the data as it prints.
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I've been warning you. Now let's see what happens. How serious is this?
I agree. My own technical analysis and indicators point towards a sharp downturn for the major indices around mid January. But we could easily see the DOW break out of the ascending wedge pattern early, which could l drag down the S&P and NASDAQ with it. With all the gaps from November that still need to be filled, I'm expecting a 15% drop at a bare minimum. But this could easily turn into something far more scary for the bulls.
I see the same thing at the moment on the s&p and it is the same for the world equity ETFs. If you do a linear regression from 2008 till now with 2 Sigma deviation we are at the top across-the-board. Not sure what to do next with equity.
gghsusa
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@MRPAPAYA001, Honestly, I can still see this entire pattern just being a consolidation in an uptrend. We're either going to have a melt-down end game or hyper-inflated end game..neither of which are good. The ingredients in this cake tell me that price is going to accelerate massively one direction or the other.
RoniWorld
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Seems to be really bullish
gghsusa
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@RoniWorld, There's still a gap up here on this daily dow futures chart. I've been expecting it to reach up a little higher.. my trend lines were not perfect so I've had to move them slightly. I've been around a while and have seen this many times. And yet it still surprises me how long topping pivots can take. Bottoms occur rapidly whereas tops (minor or major) can take weeks & months to roll
@RoniWorld, what wave are you using at the bottom?
gghsusa
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@RoniWorld, take a look at lazybear wavetrend. There are many versions of it floating around but this one is called crypto wavetrend or something similar but I like that it includes a set of moving averages.. ma's that are often respected as support & resistance.