Tag Archives: divergence

Australian S&P/ASX 200 Inside Day Pattern and Divergence

Posted on May 18, 2013 by Michael Harris

The Australian S&P/ASX 200 index has risen 11.44% this year, moving on an almost straight line to the middle of February but then volatility increased and little progress has been made. Since February 20 of this year this index has gained 2.3% and there … Continue reading →

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The S&P 500 and NASDAQ-100 Divergence Shows a Divergent Bias

Posted on January 26, 2013 by Michael Harris

The current pattern of divergence between S&P 500 and NASDAQ-100 had a positive bias in the 1980s and 1990s but after 2000 the bias is negative. During all 5 times since 2000 that this pattern has occurred, a stop-loss of 3% was triggered … Continue reading →

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Bonds are Oversold After Finding Support Just Above Their 200-day SMA

Posted on August 17, 2012 by Michael Harris

Last Wednesday before the market open I wrote that “If the short-term double bottom at $123.75 in TLT is broken to the downside, testing of 200-day simple moving average support near $120.25 is quite possible”. I did not expect this to happen in just … Continue reading →

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A Divergence in Russell 2000 Index

Posted on August 14, 2012 by Michael Harris

Divergences can be very tricky because they must be analyzed in the appropriate context. Especially divergences that involve an indicator that uses weighted averages can be very tricky because they are asymmetrical with respect to price action. Here is an example of a divergence in IWM, … Continue reading →

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SPY Attempt to Break Above $140.92 Caused a Bearish Divergence

Posted on August 9, 2012 by Michael Harris

The bearish divergence in SPY was caused by an attempt to break above $140.92, the high of the first day of May of this year. This bearish divergence is also present in the S&P 500 index as I wrote yesterday. The … Continue reading →

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Signs of a Short-Term Correction in Stocks After a Rally in Yields

Posted on August 8, 2012 by Michael Harris

The 10-year yield rose 4.5% yesterday to 1.63%. A gain of 23 basis points in two weeks is, in my opinion of course, an attempt to squeeze out those late longs in the bond market who panicked when the the 10-year … Continue reading →

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An Interesting Pattern in SPY

Posted on July 26, 2012 by Michael Harris

The pattern in SPY is interesting because in the past it has been profitable in 9 out of a total of 11 major ETFs. This is a 5-day pattern with the close of the first two days above the high of the middle … Continue reading →

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Short-term DIvergences in S&P 500 and Russell 2000

Posted on July 19, 2012 by Michael Harris

This may be called “the year of the divergences”. Short-term divergences between key indicators and/or price are caused by volatility. For example, the 14-day Average True Range (ATR) of the S&P 500 Index was at 0.82% on March 21 but rose to 1.45% on June … Continue reading →

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A Significant Divergence in S&P 500 Index

Posted on July 13, 2012 by Michael Harris

Significant divergences between two indicators I track are not very frequent and usually indicate a strong move in either direction, up or down. In the case of the S&P 500 and in my opinion the move will be to the upside … Continue reading →

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A Rare Divergence

Posted on June 28, 2012 by Michael Harris

Signals generated by a Price Action Lab scan as of the close of Wednesday, June 27, 2012, indicate a divergence between SPY and QQQ. This type of divergence is rare and it may mean a few different things with the most … Continue reading →

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