What is a Divergence?

A divergence in 3C is simply an indication of accumulation or distribution. We try to narrow it down using multiple timeframes, but ultimately we do not know how long smart money will be accumulating or distributing, still it gives us a much greater advantage then almost any other indicator I've seen.

Read Trade-Guild tonight. You will see that there are enough divergences to the upside in enough timeframes that we should see a bounce. The trades posted last night should work fine, or you can try out some ultra/3x long ETFs, but this is only a minor move, don't be fooled by it into thinking the market has become bullish.

I listed one new inverse (short) ETF tonight I saw on Telechart. the volume is low, but it is a textbook, picture perfect setup. While the market may bounce, it may fall and make for a good entry. Do not be surprised to see a move below the lower support line of the triangle as Wall Street shakes everything before they let it move. I'll keep an eye on it, you should too. Here's the chart-oh and UNG violated the stop by a penny, it's not a big deal in my book, but much more and I'll have to re-evaluate our position there.

Watch for a market bounce as early as tomorrow.

Update 2

We now have positive and fairly substantial positive divergences in the averages. You may want a long ETF to try to make a quick 1-2 day buck

Update

While the 1-min divergence was short lived if lived at all, the 5-min divergence persists which suggests a move to the upside in the next day or two, at least as of now. I would not change anything with the core shorts, but perhaps some of the longs will pop, I will have to re-evaluate the stops and entries based on today's decline.

Any 5-min positive divergence is an indication of a retracement which is totally normal

pre market update

There are 1-min positive divergences even though it looks like we'll see a gap down. We have seen plenty of false moves to the upside that were at odds with 3C readings so don't be surprised if we see a gap that is filled. In that case we may see upside from there and last nights longs may work well today. However, if the market just goes into an early free-fall with no signs of recovery, you must be selective about the longs and see which ones are bucking the trend as they did yesterday. Again, while there may be a few positions that turn into trending trades, the majority are meant to be quick pop trades. If they advance 5-7%, there's a chance they may trend more. If they pop over 10-15%, it is more likely they will be short lived.