christian.langfors

$DAX SHORT TERM - POSSIBLE NEGATIVE DIVERGENCE BUILDING UP

FX:GER30   DAX index of German listed shares
80 0 2
DAX             shorter term charts (2h in this case), might provide us with a negative RSI (14) divergence. RSI (14) should climb over ~77 in this up leg to get rid of the negative divergence. Possible but not likely. Divergences is not the holy grail to marking tops nor bottoms, but success rate has been quite good the lately.

The short term historical pattern for RSI divergences, have been on average 40 hours of trading ( futures in this case) before the divergence has come into play. That is; we should expect a pullback sometimes next week late Monday / Tuesday based on this pattern theory.

We must confirm RSI -divergences with other patterns, such as trend change in $VIX, change in market breadth .. ..or more simply, monitor instrument for putting in lower highs / lower lows.
Comment: Gut feeling says, we are in for a 10 300 / 10 450 test within 7 trading days. If this break-out is a false one (stop hunting) and we drop below ~10 050 again, short term must be re-evaluated.
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