Let’s take a moment to look at a fund you may not have been aware of, but that has formed two nice daily divergences which have since resolved that can serve as an educational example.
The fund is DUG, the UltraShort (2 times leverage) Oil and Gas ProShares fund (which moves inverse to Dow Jones Index oil/gas companies), and let’s take a look at its daily chart:

Let’s compare crude oil prices to the DUG (which actually is tied to companies, rather than crude oil prices specifically). The thinking is that stocks (oil services/providers, etc) can sometimes lead their respective commodity prices. We’ll also look at crude oil prices shortly.
As Crude Oil prices (chart below) formed a short-term top pattern (complete with negative momentum divergences), DUG also formed a semi-rounded reversal pattern before continuing higher. What I wanted to point out from an educational standpoint is the lengthy positive momentum divergence that had been building since May, which gave us further clues that downside price action (or upside in Crude Oil prices) was likely about to reverse, and give an opportunity in the opposite direction.
Most of the time, divergences precede short-term trend reversals, and this provides a classic example of the concept. You could have entered long (DUG) at the break of the 50 day EMA, or when price came back to retrace the support confluence via the crossover of the 20 and 50 day EMA (which was likely the highest probability entry).
Two mini-bull flags formed quickly after this point and almost instantly achieved their target before a lengthy negative momentum divergence began to form in DUG (positive divergence in Crude Oil prices per barrel). DUG found resistance at the $40.00 per share level, while crude oil itself found support near $110.00 per barrel at the 200 day rising moving average.
Let’s take a look at crude oil’s daily chart:

I had been calling out the positive momentum divergence in previous posts, as well as describing how the 200 day SMA could provide support and a short-term end to the downside swing. This happened quickly (complete with doji candles), as price began to surge higher, but an interested and unexpected development occurred Friday, which sent crude oil prices down over 5% in a single day (which was ultra-bullish for the broader US Stock Market - not surprisingly).
In fact, Friday’s action just about formed a “Bearish Engulfing” candle pattern, which would have more validity if it occurred at a possible market top, rather than a possible bottom (or support).
Should crude oil violate $110, the ’rounded reversal’ and divergence play would be invalidated, so this will be important to watch. A break beneath $110 would also reaffirm the strong short-term downtrend (which has already taken prices down 20%) in place.
Always watch what momentum (strength) is doing and monitor trades in real time for signs of continued strength (or weakness) for a better handle on price action as it develops.
Did you like this article?
MOD Converter for Mac MOD
aion gold aion kina aion
خليجي شات
Here are cheap north face
Here are cheap north face outlets, these northface jacket clothes are designed with a waterproof, breathable, fully seam sealed exterior shell and a removable, insulated interior, cheap northface from our cheap northface jacket online sale.-zouzhilong007
NBA Basketball
NBA Basketball Shoes
Nbasupplier.com are authentic NBA Basketball Shoes supplier, who have a long history in NBA basketball shoes trade. Their customers are from all over the world. The best quality and best service promise to you. You can find the newest and the classic style in this online store. Shop for NBA Signature Basketball Shoes from atasale.com. You can find pages with details of the NBA players that wear these brands and wich model of shoe they wear.
This New Allen Iverson Shoes : Reebok Answer XII Invictus shoes will be printed in the history. Allen Iverson is a great scorer that will have a place in the House of Fame. His sneaker has a fabulous history. If you are Crazy about Kobe Bryant Shoes, there are Nike Zoom Kobe Shoes Mens and Womens Collection for you. Or Lebron James is your idol aslo can collect all his Signature Shoes there.
The eastern part of the all star line-ups list: Dwight Howard, LeBron James Shoes, Kevin Garnett, Dwyane Wade, Allen Iverson; West all star line-ups list: Kobe Bryant, Yao Ming, Tim Duncan Shoes, Chris-Paul, Amare Stoudemire. And as we know, there are so many fans, men even women, are bound up in NBA. Atasale.com, he can support you the NBA Shoes about those NBA MVP. /You xiaoyan
chi straightener I have
I recommend you go to online
Cheap price with nice
Handbags are best liked by
uggbootonsale shox shoes
There are wide variety of
العاب | ألعاب |
puma shoes |puma speed
Refering to earrings,
raymondweil watchesdiscount
discount YSL handbags
replica Graham watches
replica Baume & Mercier watches
replica U-Boat
raymondweil watchesdiscount
discount YSL handbags
replica Graham watches
replica Baume & Mercier watches
replica U-Boat
Just for u the the best
In the cold weather, the UGG
Thank you very much for this
watches replicareplica
replica watch
replica Rolex Sea-Dweller
replica Bell & Ross
replica movado
Ferrari watches
replica Audemars Piguet
Rolex Day-Date II watch for
IWC watch for sale
Tag Heuer watch for sale
replica Patek Philippe
Bell & Ross watches
replica oris
Rolex Milgauss replica
watches replicawatches for
watches for sale
Rolex Milgauss replica
Rolex Sea-Dweller watches
Breitling replica
omega watch for sale
christian louboutin
فله |منتديات
cheap replica watchesreplica
replica watches
Bvlgari replica
Omega watches
Patek Philippe replica
Breitling watches
Rolex Submariner replica
Rolex Day Date replica
watches replicawatches for
watches for sale
replica A.Lange & Sohne
Maurice Lacroix watches
Rolex Submariner replica
Burberry watch for sale
Ferrari watches
Good post….thanks for
watches replicareplica Rolex
replica Rolex GMT
replica croum
chopard watch for sale
Jaquet droz watch for sale
Panerai watches
replica U-boat
omega watches
replica Glashutte watches
replica watchwatches
watches replica
replica watches
replica IWC
Rolex Yachtmaster replica
Bvlgari watch for sale
Rolex Day Date replica
Thanks for your useful info,