Another Triple Swing Negative TICK and Momentum Divergence

Aug 4, 2009: 2:19 PM CST

Today (August 4th) gave us yet another powerful example of the “Three Push” Reversal trade in the SPY and @ES futures which was confirmed with a ‘three push’ divergence both in the momentum oscillator and more importantly in the TICK.  Let’s take a look.

As the SPY formed the (so far) highs of the day, it did so on three symmetrical ‘pushes’ or up-swings in price that were NOT confirmed either by the 3/10 Momentum Oscillator or the NYSE TICK.

When price makes a higher high yet an oscillator or the TICK forms a lower high, this is a non-confirmation and signals that a retracement swing is more likely yet to come soon.

However, when price forms three higher highs and then we see a double-swing TICK or Momentum divergence as seen above, then this is a glaring non-confirmation of the higher prices and sets up the “Three Push” Reversal trade, in which we can play for a potential full trend reversal on the day instead of the small retracement ‘scalp’ that a normal divergence would forecast.

I’ll discuss this and the other trades as well as how to recognize structure as it develops in today’s “Idealized Trades” report, which also contains insights into what to expect for the next trading day.  For more information, and for how to sign-up (introductory price of $27 per month), please visit our Premium Section of Afraid to Trade.

Corey Rosenbloom, CMT

3 Comments

3 Responses to “Another Triple Swing Negative TICK and Momentum Divergence”

  1. prabhdeepsingh Says:

    Dear Corey Sir,
    Your analysis is excellent
    Plz give advice on indian mkt S&P Nifty
    thks
    Best Regards

  2. Eugene M Says:

    Is there a reason that you use $TICK instead of $TIKSP (S&P 500 Cumulative Tick) for trading the S&P? Thanks.

  3. Eugene M Says:

    Is there a reason that you use $TICK instead of $TIKSP (S&P 500 Cumulative Tick) for trading the S&P? Thanks.