Key Divergences Suggesting Intraday SP500 Reversal

Oct 8, 2014: 12:19 PM CST

A quick look at our “Big Three Market Internal” Chart of the S&P 500 on the intraday basis suggests another reversal up off support.

We’re seeing that at the moment, but the question is “how far will the reversal take price?”

Let’s study the situation and plan accordingly:

We’re seeing the S&P 500 Chart above with Breadth (Advancing Issues minus Declining Issues), NYSE TICK (stocks ‘ticking’ up at a moment minus stocks ‘ticking’ or trading down), and Volume Difference of Breadth.

I’m highlighting recent divergences ahead of short-term market reversals (such as October 2nd and October 6th).

The suggestion here is that we see another up-swing from the 1,930 support level similar to that of October 2nd.

Here’s a closer look for planning the potential “Repeat Pattern” from divergences:

Again, this is just a quick glance but we do see all three “Big Market Internals” forming positive divergences (higher indicator lows) at the same time price traded down to the prior low.

Divergences tend to forecast – or suggest – short-term reversals in price.

We’ll have the “Fed Minutes” released later this afternoon which could shift the structure but until then, we’ll monitor the rally higher from support … or any surprises that take the index down away from 1,940 toward the prior low.

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Corey Rosenbloom, CMT
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4 Comments

4 Responses to “Key Divergences Suggesting Intraday SP500 Reversal”

  1. Big Bear October 9 Market Update and Trending Stock Scan | Afraid to Trade.com Blog Says:

    […] same divergences that correctly forecast yesterday’s big rally and reversal (see my morning post ahead of the big ra…) also forecast the top and likely reversal that set the stage for today’s […]

  2. Big Bear October 9 Market Update and Trending Stock Scan - Trading Your Own WayTrading Your Own Way Says:

    […] same divergences that correctly forecast yesterday’s big rally and reversal (see my morning post ahead of the big ra…) also forecast the top and likely reversal that set the stage for today’s […]

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  4. Planning Another October Intraday Reversal from Positive Divergences | Afraid to Trade.com Blog Says:

    […] take a look at my intraday update post (just like this one) from October 8th which showed a near-identical […]