Inventory Grab Alert 4/30/09!
- Thread starter AMT4SWA
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Hi SoCal...
It seems the only one that did not work like a charm was at the 6:40am time period...
did i read that right or?
thanks...
Ok... i need to re snap shot what i was babbling about... thanks...
At around 5:30 am we had a lower low in the futures prices and a lower low in the CD... at around 6:40am we had a higher low in the futures prices and a LOWER low in the CD...
From that point - contrary to what a trader watching CD would think.. the market went up strongly... opposite to what one would think when watching the CD and price... A stop loss or hedge or trade exit loss would be the the actual result...
the rest of the setups worked like a charm...
hope i was clear on that.. thanks..
At around 5:30 am we had a lower low in the futures prices and a lower low in the CD... at around 6:40am we had a higher low in the futures prices and a LOWER low in the CD...
From that point - contrary to what a trader watching CD would think.. the market went up strongly... opposite to what one would think when watching the CD and price... A stop loss or hedge or trade exit loss would be the the actual result...
the rest of the setups worked like a charm...
hope i was clear on that.. thanks..
Yep, you are exactly right in your interpretation. I look at it as kind of an opposite divergence... where price is divergent from the CD, instead of vice versa.
When I try to think about what is happening, I interpret that a lot of volume (CD) is flowing into the market, yet price is not pushing lower also. I really don't know what technically is happening behind the scenes. There is another example at the end of the day from about 12pm-1pm. See how CD made a new high, but price didn't?
A lot of times when you get this inverse divergence, draw a trendline above price or cd, and watch what happens when price fails to follow the CD's suit, and breaks out in the opposite direction.
Hope that made sense...
Excellent chart and thanks for sharing! These two trades were the moneymakers of the day. The chart I posted outlined every divergence I saw, large and small. I do agree that there is a much higher possibility of a profitable trade when confuence of VWAP, S/R, Pivots, etc are involved. I hope you'll continue to post more chart examples in the future. Have a great weekend!!!
What data feed are you using? Check out my chart for the comparison... Specifically how my CD doesn't show the first divergence you had annotated. I wonder which of our CD's are wrong. I'm using Investor RT.
No, I'm using DTN IQ Feed. It's what AMT uses, so it must be quite reliable.
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