Bulls on parade

The weekly reverse divergences are playing out (some in a bigger way than others).  This is exactly why they call it a 'Slingshot' setup.
SPY- potential reverse (sell) divergence with a higher momentum high and lower price highs, but nothing actionable until the hourly sets up a sell signal.

QQQ- came within 3-cents of it's previous all-time highs and took 4-days to erase a 10-day correction.

 DIA - This and the IWM being the "weaker" of the 4 indices.  Nothing bearish until the hourly sets up a negative bias.  A good (bullish) sign that the most recent (hourly) momentum made a higher high on this push.

IWM - one to watch as it's been lagging in performance, it's the only one that hasn't taken out it's previous swing high

Dollar

The U.S. Dollar Index broke out of a resistance point this week.  I pointed out in a previous post about the Daily setting up a 3d criteria, after which time price rolled over but found support at $79.

The weekly chart (below) is interesting.  After the previous few months of selling pressure price managed to hold a higher low while momentum registered quite a strong negative reading.  This sort of reverse divergence can sometimes lead to a "slingshot" in price.

I'm still liking this Quarterly chart of the U.S. Dollar Index, as I'm in the camp that this could be a very long-term falling wedge.

Working with the above Quarterly chart I'll add a cloned trendline to give some perspective of how price has worked mostly within this channel for the majority of its life cycle

Finally, I'd like to add the 3/10macd to this quarterly chart to highlight the 3d criteria setting up on this chart while price is showing an inverse Head & Shoulders pattern.

Should be interesting going forward.

AAPL potential

Just food for thought regarding AAPL
The weekly (right chart) bounced off a 38.2% Fib. retracement with a stark reverse divergence (2c-2d setup).  What is transpiring on the daily chart (left) is the potential 3d criteria which sets up the higher time frame follow-through.
Points for consideration:
  - Price holding the 50% retrace (roughly $555)
  - A breakout above the overhead down trend line leading to the $581 resistance mark.
  - First Fib. target of a 50% projection near the $608 level.

repeat

Similar market behavior as the previous day where fading extreme negative TICK readings (-800 with volume support) throughout the day worked well.

Gap-down selling found support (again) at the previous week's Open, coinciding with a demand level from the day before as well as a 100% projection off of the gap (previous day's Close to today's Open).
Earlier in the week I highlighted the 2c setup and the reverse divergence, which is what we got this morning.  Notice how the 5-min 3/10 macd forms a 3-push divergence and then triggers a 3d setup giving us a seed wave.

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.

Common setup

Two setups on the SPY today.  First was a long off the IB-low coinciding near the Open price on a reverse divergence.  Since the 'trend' is still up (for my timeframe) buying common support levels (trend line support, IB-low, Open price, previous day's high, 20-period MA were all there) was still a highly probable trade. 
The short entry was based on the 2b criteria setting up on the 15-min 3/10macd and the trigger was the 5-min setting up the 2d-to-2c continuation pattern (a.k.a. Bear flag).  Exit was at the 100% projection.  I took everything off at the one target out of an error in judgment. 

A trade in GLD today that helped me get flat on the day after a perfectly retarded long trade in CVX
Something to look for with a strong trend in place (as was the case with GLD intraday) is known as a Slingshot setup, basically a reverse divergence (higher low in price with a lower momentum low).

last two days

Just some charts of the past two sessions in SPY.
Worth noting; the lack of negative TICK (blue histogram), the time of day when the "bottom" was made (9:50-10:10am CST).  Also, the Fib. projections off of the bottoming seed wave (100% projection reached) and the support/resistance levels based off of breakout points (where price broke out became support, where price broke down became resistance).
Tuesday:

Wednesday:

 Higher Time Frame:

 Daily; the overhead gap resistance on a reverse divergence looks to me like it will be worth a try at shorting:

Just an observation; When the 3/10 macd is in its 1a phase and the Moving Averages are oriented bearish with such a wide space between them as is the case in the above daily chart, one can look for a short opportunity at resistance.
{Update} I should have amended the above statement by saying; Unless we gap above resistance, which has been such a common theme these past few years.  This morning's gap up was just ridiculous! :/

SLV

The trend is up.
15-min chart the momentum push was the lowest reading in over a week while the swing low was higher than the previous day (just above the PDH).  It's a reverse divergence, but I believe LBR coined in a "Sling Buy" setup.  The 15-min hammer candle doesn't get any prettier.  While the 5-min trigger could have been a 3/10 macd Fast Line/Slow Line crossover, but a better entry was following the consolidation off the bottom as price formed the seed wave.
Half target was the 50% entension of the seed wave which coincided with the breakdown point of the selloff.
100% and 200% extensions of the seed wave were both met the next day.

I thought I was done....

....but RIMM pulled me back in.  I took RIMM off my watchlist a while ago, but still peek at it every now and again.  The setup was a double bottom, with a strong momentum candle followed by a tight flag.  Target was initially the 50% extension measured off of the W-bottom wave, but it was showing strength at that point (as was the rest of the market), so a target after that was the 100% extension.  Not that you needed a 3/10 macd criteria for this setup, but the 3a criteria is still a good long condition, especially when the slow line is trending so solidly up.

QCOM was an unfortunate result for me.  Entered long on the 3d condition, exited at what I thought might be a double-top (was uncertain of which way the market might turn at this point) so I exited.  I had the opportunity to get back in long, but failed to re-enter.  The Fib. levels marked here are measured off of two "seed waves", one which is highlighted on the 5-min chart, the other is indicated on the 15-min chart.

Here's a messy chart with a bunch of Fib. lines of the SPY these past two days.  The intention was to show a few things:
1- We sold off to and found support on a 50% extension confluence as measured off of the Previous Day Close (PDC) to the Open and the Previous Day High (PDH) to Low (PDL) range.
2- Price was capped to the upside with another confluence of 50% levels; 50% extensions of two momentum waves, the 50% retracement of the PDO to PDC, and the 50% retracement of the PDH to PDL.  I mention these two 50% levels because yesterday happened to be a 2x day (day's range was at least 2x greater than the previous day as explained in this document).
3- The 3/10 macd formed a V-bottom.  What I have notice about this reading is that it's best to wait until at least the Slow Line and Fast Line cross before looking to enter long.  You can visualize the macd forming a cup and handle pattern if that helps.

In comparison to the V-bottom macd pattern in AMZN today, it's just safer to look for an entry when the Fast Line and Slow Line have crossed:

Another Chart I found interesting was IWM and the number of Reverse & Regular Divergences we've seen these past two sessions.

78.6%

78.6% retrace so far in SPY on a reverse divergence

divergences

A number of examples of a Reverse Divergence set up on Thursday.
FCX: Momentum registered its lowest reading since last week on a higher low, leading to a snap-back rally, while the re-test of the highs fizzled out, printing another divergence (lower high in price with an equal to slightly higher momentum reading).

RVBD: Reverse divergence on Thursdays lows and highs.  The long entry off the reverse divergence worked, but the sell signal didn't work out.

MON: The opening high was a sell divergence which turned out being a stubborn short.  Meanwhile the lows of the day was a buy divergence based on a strong momentum reading lower on a higher overall low.

MEE: Lower momentum lows on higher price lows, while on the 5-min a buy divergence triggered a long back to the Open of the day.  The Cup w. handle measured move was reached the following day.

CNX: More of the same reverse divergence, arrows indicating trigger entries

CDE: One which didn't work.  But the fact that it didn't work should be considered a hint at weakness going forward