"TA doesn't work" - ET member, LOL <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1562628>
price action looked like a bear flag rather than a reversal, that's where indicators strength is, that was probably one of THE best divergences possible ie consolidation followed by 3 upward thrusts at the time when histogram kept putting in lower peaks, centerline cross (by histogram) marks a possible point of entry after 3 declining peak and trendline break confirms it.
So when you say divergence you are talking about the pattern of the MACD histogram making lower lows as in the example here? http://www.investopedia.com/articles/forex/05/MACDdiverge.asp
I agree 100%. MACD histogram divergence is also confirmed by RSI divergence (each of the lower lows corresponds to a higher RSI.) These are strongly suggestive of an up-move from here. I'm long small size in AH from 1456.50 with 6-tick stop.
I want to share a story with you. Before the internet, when the internet was just being used by major universities, there use to be computer games called LPmuds. LPmuds were text based games, that had dungeons and dragons theme to them. But while playing the game, you would become totally engrossed in it. It was similar to reading a book. After a few minutes you don't notice the words but the mental imagery is all there is. Well these LPmuds had their own rules and framework and economy. Like in any game, the goal was to accumulate the most number of items, and gain levels quicker then your opponent. A few college students would just stay up all night at the computer lab playing these games. These LPmuds were multiplayer similar to our online internet games today. People from all over the world would connect to these text games. So a simulated perpetual world would exist. Like any virtual world, the dynamics of it would be apparent, what actions were most efficient, and which were not. It ultimately came to one factor during the game. The amount of 'xp'/minute. Well after hours and hours of playing and exploring the huge virtual world, you would notice faults in the code at times. And if you used the faults in the code to your advantage, it was considered an 'exploit'. Well one day our group found a fault in the code, that was very subtle, for the next few hours and days, we just abused this code relentlessly. And we were gaining levels that would normally take months, but we were doing it in days. Eventually the virtual world creators noticed this, and shadowed us invisibly observing our action and exploits, we were advised to stop or risk having our characters deleted. So we stopped. So we maintained our good behavior for a few days and the 'exploit' was fixed. But if you looked long enough, other exploits could be found. And a similar thing happens in the present graphics based games such as Warcraft or Everquest. Whats the goal of Traders?, to find a exploit in this global real life game we play. I don't play the online games anymore. But the same dynamics of what I use to do early on as a teenager, I'm doing now. edit: heres the link to the lpmud. http://www.overdrivemud.net/postnuke/ http://www.fos.ut.ac.ir/links/Inter95/ira/data/sect72/list22.htm Chris
watching 'Fast Money', gang touting tech shares... how many days ago did we talk about tech outpeforming secondary to global tech rebuild...