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Do Negative Divergences Matter 5/18/21

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When I first started doing MACD charts in Metastock on an Apple 2e computer in 1982, I thought that negative divergences between oscillating indicators and the market averages were the be-all, and end-all in TA. 

Truth is, they're meaningless. We have another one this morning on the hourly chart of the ES fucutures. Like all the others I have seen for the past 39 years, this one could lead to a rollover, or it could lead to reacceleration to the upside. Take your pick. I will take door number two, just because the Fed and Treasury continue to pump godawful amounts of money into the market every day. 

That would mean we're headed for a mini breakout to 4185. And if they clear that, a trip to revisit the highs of last week. 

tvc_cd8258e1a8c66b3cb33e915037839aa0.png

 

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Treasury Adds to Fed QE to Create Bullish Cash Tsunami

 

 

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  • DrStool changed the title to Do Negative Divergences Matter 5/18/21
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What's it all about Alfie?

The uptrend is busted and there are sell signals from negative divergences on the indicators. They work, more often than not. 

tvc_c95faaa049e37b854dcf44e638816fc4.png

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Bulls won yesterday's screen game by 27 to 8. One of the short term sell signals was an inverse ETF, so that went into the bulls column. This compares with Friday's 153 to 8 bull surge, which suggests a new bull swing phase. 

The 5 day total is 241 buys to 97 sells, a spread of +144. That's up from +99 yesterday.

I screen all stocks and ETFs from the NYSE and NASD, excluding those with less than an average of 1 million shares per day traded, and selling for less than $6 per share.  The table below shows swing trade buy signals and sell signals from yesterday's action. The numbered columns represent the time frame of the support or resistance trend around which the signals were generated.  

Here is today's  output. The number 1 indicates that the condition is true. 0 is false. The numbers on the right half of the chart represent the time frames in days of the support or resistance areas where the signal was triggered. 

Symbol Buy Sell 500 200 125 50
SGOL.K 1 0 0 1 0 0
AMZN.O 1 0 0 1 1 0
GOLD.K 1 0 0 1 0 0
BHC 1 0 0 0 1 0
BB 1 0 0 1 0 0
COG 1 0 0 0 0 1
PRTS.O 1 0 0 1 0 0
CXW 1 0 0 0 1 0
CRON.O 1 0 1 0 0 0
ETRN.K 1 0 0 1 0 1
FBC 1 0 0 0 0 1
HTHT.O 1 0 0 0 0 1
HGEN.O 1 0 0 0 1 0
HYRE.O 1 0 0 0 0 1
PGX 1 0 0 0 1 0
IJR 1 0 0 0 0 1
IWM 1 0 0 0 1 0
MNST.O 1 0 0 0 1 0
PVG 1 0 0 0 0 1
PSEC.O 1 0 0 0 0 1
ST 1 0 0 0 1 0
GLDM.K 1 0 0 1 0 0
XRT 1 0 0 0 0 1
SURF.O 1 0 0 0 0 1
TCOM.O 1 0 0 0 1 0
UA 1 0 0 0 0 1
CARG.O 0 1 0 0 1 0
CLVT.K 0 1 0 0 1 0
TECS.K 0 1 0 0 0 1
FOXA.O 0 1 0 0 0 1
EWY 0 1 0 0 1 0
EWT 0 1 0 0 1 0
MFC 0 1 0 0 0 1
PRGO.K 0 1 0 1 0 0
PHYS.K 0 1 0 1 0 0
Totals 26 9 1 9 13 14


This is raw data. These are not recommendations. They represent charts that have triggered short term signals near key cyclical support or resistance levels. Pick through these and see if there are any that you like using your own charts. Feel free to post your charts here with comments. 


Every weekend I use the previous week's screens to select charts that have potential for a move, and I post them for subscribers.  

Dodging Bullets – Swing Trade Picks For Week of May 17, 2021

 
 
You can see which ones I actually pick each week by subscribing to Technical Trader. Try it for 90 days risk free (first time subscribers).
 
 
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11 minutes ago, PullMyFinger said:

I swear, the S&P today is lazier than my brother-in-law. And I didn't even know that was possible. 

Does he know how you feel about him? 

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I'm conditioned (and resigned) to think that pattern resolutions wind up in a northward trajectory even despite the Elliott Wave software thinking that W4 is over and W5 will resolve downward in the chart above. That red PTI number at 15 gives me pause. Generally, Wave 5's fail to materialize, or result in at best a double bottom when that PTI number is less than 35.  

As a brilliant anal cyst frequently reminds, all chart patterns are . . . 

Sitting on my hands and bored as heck so far this week. Just can't get a read or a feel for this thing. Wish I was better at trading 2 or 4 minute charts. 

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Second higher low today. Let's see if they can break the steady line of lower highs. 

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I watch 3 min bars on the SPY and they're really getting ground into dust. But overall, it looks like the next move is more likely to be up than down.

 

spy.jpg

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