SPY AND DIVERGENCE
SPY RSI shows overbought conditions on the monthly with bearish divergence for the first time since the last bear market
To negate this SPY price would need to push MUCH higher and hence go into new overbought territory
SIMPLE PRICE ACTION/ DIVERGENCE tutorial
Is price/momentum bearish? LOOK AT THE HIGHS
1. if price is making lower highs: that's bearish, and we'd expect the indicator to follow (see 3)
2. if price isn't making lower highs BUT the RSI is: that's bearish
3. If price is making lower highs and the indicator is making higher highs this is HIDDEN BEARISH divergence
Is price/momentum bullish? LOOK AT THE LOWS
1. if price is making higher lows: that's bullish, and we'd expect the indicator to follow (see 3)
2. if price isn't making higher lows BUT the RSI is: that's bullish
3. If price is making higher lows and the indicator is making lower lows this is HIDDEN BULLISH divergence
*trade at your own risk*
To negate this SPY price would need to push MUCH higher and hence go into new overbought territory
SIMPLE PRICE ACTION/ DIVERGENCE tutorial
Is price/momentum bearish? LOOK AT THE HIGHS
1. if price is making lower highs: that's bearish, and we'd expect the indicator to follow (see 3)
2. if price isn't making lower highs BUT the RSI is: that's bearish
3. If price is making lower highs and the indicator is making higher highs this is HIDDEN BEARISH divergence
Is price/momentum bullish? LOOK AT THE LOWS
1. if price is making higher lows: that's bullish, and we'd expect the indicator to follow (see 3)
2. if price isn't making higher lows BUT the RSI is: that's bullish
3. If price is making higher lows and the indicator is making lower lows this is HIDDEN BULLISH divergence
*trade at your own risk*
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