More Divergences and a Price Planning Grid for SP500

Jun 12, 2015: 12:04 PM CST

Intraday divergences have been very helpful lately for calling intraday reversals in the stock market.

Today’s session is no exception as a negative divergence yesterday suggested a bearish reversal today, which is how the market opened this morning.

Let’s learn from these divergences and plot a “Price Level Planning Grid” over the current landscape.

We’ll start with the @ES Futures (S&P 500 e-mini):

For reference, be sure to start with a couple of posts this week regarding the real-time divergence:

“Trading the Expected Bounce Rally off Support”

“June 11 Market Update and Stock Scan”

Both of these charted the divergence – and real-time planning – as it occurred.

Now, we can focus on the lessons to learn and apply our knowledge to future situations like this – and profit!

A positive Breadth Divergence took place early June 9th on a powerful reversal up away from the 2,070 level.

From there, price traded toward – then slightly above – our 2,100 @ES target.

Another “V-Spike” or price reversal took place on a Negative Divergence through yesterday’s session.

Today, we’re seeing the logical downside break and sell-swing action “down away from” 2,100.

Divergences often – though certainly not always – forecast short-term reversals.

With that lesson in mind, we have a level planning grid for the current structure:

Our Fibonacci Retracement Grid shows key levels into 2,100 and 2,086 and the market has probed just beyond these levels yesterday and today.

Our focal point right now should be the 2,085 @ES level as a pivot, making us “bearish” on a movement down away from this level or “neutral bullish” on a bounce up off this level.

Make note of the divergences and these levels as we plan and trade the remainder of today’s session.

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Corey Rosenbloom, CMT
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2 Responses to “More Divergences and a Price Planning Grid for SP500”

  1. Silva Says:

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  2. Zafar Says:

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