ES Journal Archive (2006 - 2008)

[Buy1Sell2]

Quote from ae_trading:

I would agree. I look for reverse divergence as an indication that the trend will continue.

Since I mostly look to trade with the trend(if you believe in them) that is why I sometimes will use a reverse divergence as the beginning of a signal.

Another indication of the trend I like is the 55 day EMA which is the blue moving average on the chart. Since we have remained under or only slightly over it, I have remained bearish.

Yet, as we drop back into this congestion area(or should I say, if we do) I become more cautious since it will most likely present serious support.

-ae

One of the characteristics of the Histogram is that higher peaks indicate higher prices to come and lower troughs suggest lower prices in the offing. So you are not off base, but this is the only time I have heard the term "reverse divergence". Usually , I just hear the term "trend" or "continuation" used.

 

[Buy1Sell2]

Quote from romik:

WC? yes, that was a great call!

Water Closet right?

 

[hpeganz]

Do we have a BLD on the hourly chart?

Do you think the MA hasn´t still flattened out a bit so this BLD is weak .....??

 

[Buy1Sell2]

Quote from hpeganz:

Do we have a BLD on the hourly chart?

Do you think the MA hasn´t still flattened out a bit so this BLD is weak .....??

The divergence is not quite there yet, but the setup for it to happen later today or tomorrow is classic. The MA is beginning to flatten a bit, but this divergence is not quite mature yet. If you were to get an order in now, it would be best to use a trailing buy stop as an entry order.

 

[Buy1Sell2]

By the By, the 5 minute chart has already shown Bullish divergence on all indicators this morning.

 

[hpeganz]

Quote from Buy1Sell2:

The divergence is not quite there yet, but the setup for it to happen later today or tomorrow is classic. The MA is beginning to flatten a bit, but this divergence is not quite mature yet. If you were to get an order in now, it would be best to use a trailing buy stop as an entry order.

Do you mean only the the angel of the MA determines the maturity of the divergence?

 

[Buy1Sell2]

Quote from Buy1Sell2:

By the By, the 5 minute chart has already shown Bullish divergence on all indicators this morning.

As usual, the 5 minute was tradeable for a couple of points when the hourly trend and MA is steep. A bullish entry for extended gain at this time should be approached by using a trailing stop above reaction high. If you are still short from yesterday, then the trailing stop would be used for profit taking or perhaps exit an reversal.

 

[Buy1Sell2]

Quote from hpeganz:

Do you mean only the the angel of the MA determines the maturity of the divergence?

No, but it usually helps. The maturity factor is not there on this divergence yet due to the fact that the Histogram has not yet shown it's extreme point in the trough(hasn't turned back up for one bar yet).

 

[Buy1Sell2]

Quote from Buy1Sell2:

I suspect that there will be a buying opportunity in the 1268-1269 area.

Notice how I was wrong about this yesterday. You may recall that I looked at an hourly uptrendline and this showed where there might be support. This is the problem with trendlines and patterns. They are too subjective and the person looking at them can make them mean anything that they want. Indicators coupled with price are much more objective and should be used/favored over trendlines etc.

 

[hpeganz]

Quote from Buy1Sell2:

As usual, the 5 minute was tradeable for a couple of points when the hourly trend and MA is steep. A bullish entry for extended gain at this time should be approached by using a trailing stop above reaction high. If you are still short from yesterday, then the trailing stop would be used for profit taking or perhaps exit an reversal.

... do you mean this BLD on 5 minutes ???