Seeing some bearish divergence here on the hourly. Higher time frames aren't showing divergences, though.
RSI has been overextended for a number of trading sessions now, similar to September 2020 when we saw a 10% correction.
Currently there is some divergence between the ROC and the price of SPY. ROC (rate of change) is a momentum indicator.
There have been multiple divergences like this before, and each one resulted in a trend reversal.
The ROC has moved back towards the mid-line, which is a sign of waning momentum. If we cross below the mid-line (0 value) then we could see some...
I may have found a pattern between all the corrections we've had since 2018.
There seems to be a 1.7x factor between them.
12 x 1.7 = 20.4
20.4 x 1.7 = 35
If the pattern holds true then...
35 x 1.7 = 60
If the pattern continues, then that would mean a 60% crash for SPY.
If we assume the bottom of the 60% crash follows the lower support level as shown on...
Lots of similarities between the two rising wedges (orange lines).
Both have a double top in the RSI.
Both rallies about 150 days long.
Both rallies breached the upper resistance level of the wedge.
In both instances, a correction of about 7% gets us back to the green support line.
If we break down from that, then the purple line should be the next support...
This chart is the ratio between QQQ and SPY. When the ratio increases, it means QQQ is outperforming SPY.
Just recently the ratio broke out of a symmetrical triangle, and now we may be entering into an ascending channel (purple lines).
If we can manage to stay within the ascending channel, then it's safe to assume that QQQ could outperform SPY by 5 percentage...
The bear flag hit our price target perfectly, so perhaps the worst is over.
Historically we've had some serious support at $49, so we should be able to stay above this level.
If we break the support level and then break down from the falling wedge, then we can expect to fall further toward the 200d MA.
If we stay within the falling wedge, we can remain bullish.
Ford has diverged significantly from the ascending channel it's been in, so I wouldn't be surprised if we see a retracement back into the channel.
We perfectly hit the 50d MA, but whether we break through that is the important thing to note. Watch out for it.
Bearish divergence on the daily too, which is bearish. Momentum seems to be flipping.
10% drop from...
We have to hold above the lower support line of this symmetrical triangle.
If we close below it on the daily, then we can expect to go even lower (the price target for the break down is very very low).
If we hold and end the day green, then we'll likely stay within the triangle, and move closer towards the 50d MA, which is when I would flip to bullish.
Keep in mind we're in a rising wedge right now, which is bearish biased.
We made a higher high recently, but RSI made a lower high (bearish divergence).
Same exact thing happened just before the covid crash. We had a run up in price and higher highs on the RSI. Then as soon as the bearish divergence signalled, we got a crash.
Please have a look at this chart. Scroll all the way back to 1999.
At present day we are very far above the 50d moving average. It's frightening how high we are.
Bearish divergence from Jan 2020 to present day.
Bearish divergence in 2018, leading to a 20% retracement.
Bearish divergence in 2007, leading to the global financial crisis.
Bearish divergence in...
On the 1H we have a H&S pattern. We just broke down from that, which is bearish.
However, we are still within the mini descending channel (black lines) for now.
Important next move: if we bounce off the lower support of the mini descending channel, then we can sleep easy.
If we break the support then we could head further down, maybe 10%. Last time we broke...
We are going to be testing the upper resistance line of the falling wedge soon.
If we break the upper resistance line and stay above the 50d MA then it's bullish.
If we get rejected at the upper resistance line, and cross below the 50d MA, then we are probably going to stay within the falling wedge for a bit longer
We broke down from the descending triangle - bearish reversal initiated.
Need to retest $1.4 and then confirm as support again for me to be bullish.
We are now below the 50d MA on the 4H time frame - be cautious.