Reverse Divergence

The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it.  I use this criteria as a way to alert me to an existing condition of price.  I trade the 15-minute time frame with the 5-minute to trigger me into a trade.

The 2c condition presented itself in the SPY today, leading to a reverse buy divergence (higher low in price with a lower low in momentum, often occurring in condition 2c).  There wasn't a solid "trend" today (for my time frame) like there was last week, but price spent these past two sessions pulling back to a mean (20- & 50-period Averages) following the recent downward momentum which started off the week.
Some things which may be be present for a buyable 2c setup:
- 3-pushes to a low, evident on the 5-min time frame, often resembling an inverted Head & Shoulders pattern. 
- The 3d setup on the faster time frame (look for a measurable seed wave).
- An orderly trend down which is broken, leading to price discovery back to a significant breakdown point.

There was upward momentum (gap above previous day's High) off the open this morning which spent the early afternoon pulling back.  This pullback found support at the 50% retracement level as measured off of the previous day's Close to today's Open.

UCO

Unfortunately this is a "hard to borrow" issue on the short side, but it's the only thing I've found that closely reflects the movement of Crude Oil.  When a trend is strong (for my purposes the 15-minute chart with 20- & 50-MA's indicate trend direction and strength), and the trend in Crude has been bullish all week, you'll see these momentum sell-offs into support that are good buying opportunities. The momentum indicator sets up a reverse divergence ("Sling Buy") where there is a lower low in momentum and a higher low in price. The 5-minute chart demonstrates three pushes to a low forming an inverted Head & Shoulders. First target was the 100% projection which coincided with the price breakdown point. Position closed on price failing to hold the Open on waning momentum near the end of day.