Dow Divergences today

neil

Legendary member
5,167 747
Dow chart

Chartman

Are you using RSI and CCI to confirm divergence at the same time.
For example would you ignore any divergence if only one of the two indicators showed divergence?

Secondly, what moving average are you using on the one minute chart, and is it useful in triggering intra-day trades ?

Regards

Neil
 

ChartMan

Legendary member
5,580 46
Yes , I use RSI and CCI most often, and get a real confirmation when both show divergence.Other indicators will show divergence as well, particularly "Phase". Be aware that divergence doesn't guarantee a reversal!
On all my 1 min charts, I use 100 ESA as the moving average.This seems to be a good compromise. It also works on the 10 min charts as well.
I can't say the I would use the MA to trigger anything, BUT, I never contemplate opening a trade close to the 100MA on 1 min chart as this is where most whipsaws are to be found.You can see from the current chart, that once in a trade, the 100MA is a good guide for trend continuation, or termination. Again, if you use it for termination, I would be reluctant to consider a reversal of the trade at this point due to whipsaws.
 

ChartMan

Legendary member
5,580 46
Today's DOW Divergences

Today's divergences were very prominent. The first, was confirmed very early on with most indicators ( just RSI and CCI shown). If anything, they came in too early, tempting jumping the gun. The clue here is to wait until CCI has passed through -100 going positive. At the possible first confirmation at 9730, CCI was still at -130 or so- far to weak to get in to be safe.
The second was negative divergence from the several "tops" around 9775. Here, the choices were a little easier, giving several opportunities to get out within 7-10 points of the top, each peak making lower highs over an hour or so. NOTICE also the "rounded/rolling top" that formed here, giving further confirmation, as if it were required....
 

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ChartMan

Legendary member
5,580 46
Important positive Divergence build-up over that last two days indicating a direction change. The first part of the chart shows the build up of RSI and CCI whilst the price was still dropping significantly, culminating in the first bottom at 9807.Then folloed a rate change in RSI confirming the bottom. Note at this point there was no divergence between TA and price,and therefor it is not possible to say with confidence that this is "the lowest low".After a brief rally, ther was a re-test of 9807 but this time ther was a significant positive divergence between TA and the price.This is confirmation of a true bottom and a safe long at 9820 or so.
there was a strong rally to follow, with all lows making higher lows, and all but the final high making higher highs, giving hope to a good day tomorrow.
 

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neil

Legendary member
5,167 747
Excellent post...to be printed and studied at leisure. I find I learn more with pictures than a thousand words.

Thanks chartman.

Neil
 

ChartMan

Legendary member
5,580 46
Today's divergences.The first on calls the first important top from the start of the rally. The second one was less important, unless you got in at the tricky double bottom at 9890....Finally, the last double bottom was a call to go long overnight....
 

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ChartMan

Legendary member
5,580 46
Jay asked in the chatroom today " how did you call the long entry at 9932". This was question was put to Skim, who had a different answer, but equally precise.It's nice to see people use different techniques, and geting practically identical descisions. My descision was based on my favourite, positive divergence, confirmed by two indicators.
 

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