October 27, 2011
- ES Four hour is moving up with negative divergence.
- Price and MACD is diverging.
- Price may hit the resistance line once more before the correction can start. A false spike above the resistance line is also possible.
- Divergence need price confirmation before one can go short. So if price sustains above the resistance line then the divergence will vanish.
- Wedge has broken the support line. Price is also staying below 200 Day SMA. Daily candles closing below 200 SMA will favor a bearish trade now.
- US Dollar Four hour chart is forming a falling wedge pattern
- Falling wedge is bullish reversal pattern So price need to break the falling resistance line for USD to move up which means Stocks might start to fall.
- Price breaking the lower boundary will invalidate or reduced the credibility of this pattern.