possible. But IMO the diamond is too small within the context of the market as a whole to indicate an IT reversal. I would want to see a diamond on the daily chart for that. Or at least on the 60 or 120 min chart.
Diamond on 15 min may signal reversal, but it would apply only to 15 min.
Hi Steve, I am honored that you refered me about the diamond:-) I made another discovery on the daily charts last night: DIA exceeded its April high for some days already, unlike its reference index, Dow30. Well I have never seen so much volume divergences as now on a daily. A PVT (price-vol-trend) divergence is a rare occurence but when it happens it is a sure thing reversal. I plotted PVT on the same price window to make it clear to compare with price. A 1st divergence did appear at April's high and we all know what happened after. But the divergence we see now with this new DIA high is huge, that is: very ugly. And this time all other volume indicators including OBV diverge as well. This comforts my bearish bias... Carl http://screencast.com/t/due9qPGn7
The last diamonf topping pattern I spotted was back in early October. It ended with a burst upwards on 5th October!
Steve, don't beat yourself up about I1, these are weird times. I do sense the market has about reached its upper limit though, and I1/the overstretch will cause a wave3 down, very sharp and it will take out 1040 with ease. Just a matter of when?
.bmp)
possible. But IMO the diamond is too small within the context of the market as a whole to indicate an IT reversal. I would want to see a diamond on the daily chart for that. Or at least on the 60 or 120 min chart.
ReplyDeleteDiamond on 15 min may signal reversal, but it would apply only to 15 min.
Hi Steve, I am honored that you refered me about the diamond:-)
ReplyDeleteI made another discovery on the daily charts last night: DIA exceeded its April high for some days already, unlike its reference index, Dow30. Well I have never seen so much volume divergences as now on a daily. A PVT (price-vol-trend) divergence is a rare occurence but when it happens it is a sure thing reversal. I plotted PVT on the same price window to make it clear to compare with price. A 1st divergence did appear at April's high and we all know what happened after. But the divergence we see now with this new DIA high is huge, that is: very ugly. And this time all other volume indicators including OBV diverge as well. This comforts my bearish bias...
Carl
http://screencast.com/t/due9qPGn7
Carl, I like the divergence you pointed out. Thanks for posting. Hopefully the Diamond will play out and be the start of a much larger trend down!
ReplyDeleteThe last diamonf topping pattern I spotted was back in early October. It ended with a burst upwards on 5th October!
ReplyDeleteSteve, don't beat yourself up about I1, these are weird times. I do sense the market has about reached its upper limit though, and I1/the overstretch will cause a wave3 down, very sharp and it will take out 1040 with ease.
Just a matter of when?
Gary
ReplyDeleteThis time I believe the break will be down.
Carl that is an amazing graph and seems to indicate a 87 style crash very soon, and I hope it is within the I1 timeframe. Make us all happy!
ReplyDeleteThanks for sharing, Carl.
ReplyDelete