ucsgears

Major Market - Divergences?

AMEX:SPY   SPDR S&P 500 ETF
204 11 6
We had some serious rally after my last update on SPY             . Some may say this V bottom is bullish . I beg to differ.
There is some sort of divergence in the market or the market darlings. There are few stocks outperforming. On the other hand, those that were outperforming had some bad earnings. Future will unfold itself.
- This is the time, one should test their sound strategy.
Trading pullbacks to Keltner Channels or playing the breakout.

IWM             rsi breakout to the low.

GL
ucsgears PRO
2 years ago
The Left Bottom was supposed to be DIA, I don't know how that got messed up.....
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ucsgears PRO
2 years ago
snapshot


That's what I had there
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ucsgears PRO
2 years ago
Watch for the trendlines there!!
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ucsgears PRO ucsgears
2 years ago
snapshot
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2use
2 years ago
I did not post any ideas, but i have all these charts as well. It is only RSI though, CCI is not that evident. But again we have a jump start - too many good news? So solid? We had such a run, i wonder how hard will we fall.
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ucsgears PRO 2use
2 years ago
Well, if you recall my post, how divergences are created in a momentum indicator. You will see what I mean. I hardly use indicators for analysis. Indicators are only used for scans, and serves nothing more than that for me. Accelerating and Decelerating trendlines are mostly what i look for in a trending market.

Yes, its just RSI, MACD still not shows the same. Again i can manipulate the indicator settings to show the divergences.
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2use ucsgears
2 years ago
I watch for trend ranges and use indicators for better navigation within those ranges (i assume you meant the same with lines). Ill be watching out for more action on he divergence, but i would add that once indicators are in overbought, the tend to end up in oversold at some point. And many indicators in overbought now
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ucsgears PRO
2 years ago
snapshot


This is what you expect when a divergence presents itself. A pullback. If you know how to manage and enter, You are good to go. Now is this going to go any further?? Stay in the trade, unless you get a reversal trigger in opposite direction.

POINT IS, you don't need to complicate your life with 2000 indicators. Indicators are meant to make your life easier, Not hard.
+1 Reply
2use ucsgears
2 years ago
True, i had more indicators i checked before :) But i like to see them align. Indeed, i already seen the divergence on RSI/CCI. Im also on a lookout for the best combination of indicators, something that gets closer to making a correct decision. Still, cant disagree - a divergence on RSI still works, as simple as it is. What is your opinion on the fact that IWM lags the rest and has not made higher highs and possibly makes a bull flag?
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ucsgears PRO 2use
2 years ago
Well, Small caps are the last to run and first lose. Out of 2000 companies, there are few junks there too. The weight distribution on this etf is not much different than SPY. The companies from financial sectors in IWM are not favored by small cap traders - not volatile enough to trade them, Energy and Miners tickers are taking huge hits. Some of the tickers are down almost to all time low. With that being said, IWM runs with healthcare, consumer cyclicals and Techs. Biotechs in small caps are not doing that great. 2013 run took the small caps techs and cyclicals beyond valuation. It was good to trade stocks there for quick multipliers.. 2013. This year, all the darling (primarily - Solar, small cap biotechs) are not that great. ETC....

General rule is - Small caps are last to run up and first to slide down.
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2use ucsgears
2 years ago
Indeed, i know that rule..and it ca be seen that they are not in an upward trend as of yet, maybe a bull flag if it breaks.
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