Discussion in 'Technical Analysis' started by myminitrading, Feb 1, 2007.
This is got to be frustrating to all technicians.
This is strange, the ADX has been declining since Nov, yet the index has been rising. I see more divergence now with out a correction, than any time in the last 20 years.
Daily chart INDU.
I went back to 1996-1998 to find a similar situation as to what we have now.
The current divergence looks more like 96 in length, but even in 96 we had nice retracements. The current situation is lacking any meaningful retracements. This may mean the fall will be harder and faster I am not quit sure.
After I saw this I am not relying on divergences any more this one went on for 3 years.
I will stick with my intraday charts.
There are absolutes in rsi, macd, etc. In strong trends these indicators and systems are useless. Price action and time is all you need.
Divergence should be used as a warning, only price action confirms a change in trend.
Thats exactly right, I take this setup in the SP500 futures as a strong warning, let see if the bears have any fight left.
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