In this chart I used US 30 Year Treasuries weekly chart to explain how price and indicator analysis work.
I cover the basis of divergences, pullbacks, throwbacks, and exhaustion spikes.
Pullbacks (red) are seen when price and indicators such as RSI have diverged for a great length (wide divergence) or when you have weak divergence top comparing price and RSI. Throwbacks (blue) have the same effect, however show up when you have a bottom divergence or exhaustion spike.
If you notice wide divergence tops or bottoms more than often develop a stagnant price pullback/throwback. This is important to understand for timing purposes with instruments such as options.
When you have a weak major divergence top or bottom, there is usually a strong pullback/throwback occasionally surpassing the original price top / bottom.
Exhaustion spikes often happen after strong pullbacks and pullbacks that price sideways for a long duration. Exhaustion spikes are difficult to call bottoms or tops because they can lead to large price moves. To find an exhaustion bottom it is best to look on a much smaller time frame for strong angle divergences.
For TYX I am waiting to see a rapid price movement to the downside or a divergence signal with a lower bottom in price and a rising divergence indication.
Normally I would cycle (weekly - daily - hourly - 30/15 min) to find a divergence signals.
jangseohee
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Eye opening for divergence school of thought, can never be found in TA textbook!
QuantitativeExhaustion
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Zeroing in on that last exhaustion move. Using 1 min chart to find divergences with fast moves like we saw with TLT.
Lemnos
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Market Up, But RSI down ... Himmm , very good signal
QuantitativeExhaustion
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1M Chart
2W Chart
1W Chart
1D Chart
3H Chart
1H Chart
30 Min Chart / Waiting for Overbought - Divergence Signal
5 Min Chart / Waiting for Overbought - Divergence Signal
QuantitativeExhaustion
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Here is TLT, ETF for US 20+ year bonds, which trades nearly inverse of TYX.
seine
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what is your RSI setting?
QuantitativeExhaustion
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1D
Hello Seine
I use both RSI 14 and RSI 50. I use two because one will display the magnitude of an exhaustion spike much better (RSI 14) than a longer length RSI. With a longer length RSI, like RSI 50, I find it much easier to scan charts for divergences.
1H
seine
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thank you :) very interesting,
QuantitativeExhaustion
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Other observations when comparing RSI 14 and RSI 50.
Exhaustion spike Dec. 2008
Strong angle divergence on daily chart.
Normally I would cycle (weekly - daily - hourly - 30/15 min) to find a divergence signals.