mbusch I'm sorry, but I don't understand what divergence in RSI you are talking about. can you post a chart? and include what length of bar (1 min, 30 min, 120 min, whatever) you are looking at.
This is a 240-tick chart. I find that tick charts work much better than time-referenced charts in current market conditions, because they effectively expand the time scale when trading is fast and furious and compress the time scale when trading is slow (e.g., after hours). On Thursday, I was using the 240-tick chart for strategic setups and the 60-tick chart for tactical entries and exits.
I bought a 10 lot here at 47.50. The lenders are disconnected from this drop. I think we could see a small bounce to 65 tomorrow.
I consider my example of 2 hour charts being a better example of a book perfect divergence, considering we just saw the "momentum" that it created, there was no buying opps as such, I missed the boat in DAX (been out), though a sell signal off a short term chart was extremely evident first thing in morning, so because I mainly operate "Buy Low, Sell High" I wasn't going to sell lower, I ended up buying dips and subsequently ended up a net loser. But that is the beauty of being a counter trend trader, losses are small in relation to gains.
there is aggressive CB intervention going on througout the globe. I applaud the ECB, they are very progressive. If your short I would be careful, ths intervention could lead to a turning point in the market. the recent technology earnings have been pretty good. Once people sense that the CB's are working to mitigate this situation, these companies with great earnings will start enjoying inflows again. edit: notice the commodity deflation...there are beneficial effects from this crisis that are accruing. edit: keep your newswires open and pay close attention to any FED moves, in the coming days, it will be a violent reaction.
I would be curious to know what happens when it doesn't work? Of course everyone will say, impossible, intervention will always work. They said the Berlin Wall would never come down as well.
if this problem is as big as i think it is....this enginered bail out will be short lived & we`ll roll over. the only time these things start leaking is when the dam can`t hold anymore water......this thing has been covered up & sugar coated for so long that it can`t be ignored anymore.let it collapse & punish those for once instead of giving them a free pass. this whole sysytem needs an enima & there will come a time where the PPT will be overwhelmed in a tidal wave. media/CNBC already have included the word "bottom" about 17 times in the last 5 min....which tells me cya @ 1400 sooner rather than later....just hope they give us a chance to sell the right shoulder one more time...dow 700. if we crack 13,150.....we have a H&S target of 12,400....with a brief stop at 12,820 = 200day. for those of you whom only watch ES charts may want to incorporate dow cash charts into you arsenal as it tells the complete story more often than not......the ultimate sell was the last test of 13,700/right shoulder....which coincided with 1410/ double TL kiss.....you only get those types of setups maybe twice a year.