Stage 2 Timing-IWM Example

This may be tricky, normally I'd expect more of a "U" or "W" process, but in a dead cat bounce this is one of the few times we can get "V" reversals, I'd much rather see some lateral movement or "U" shaped as this gives us more time to get ready, but for an equity example of stage 2, this should give you some idea as to timing and each of the averages are going to be a bit different (but if they start moving in the same fashion that will be a good signal) and there are other things like leading indicators, levers, etc.

 IWM 3 min (remember I said the divergences in the averages which are 10 hour or so behind the futures, are typically in the 2, 3, 5 and some 10 min charts). When the 3 min starts leading that will be a better signal leading us closer to timing I believe.

 IWM 5 min with a relative positive, 3C needs to turn up and lock that divergence in.

 IWM 10 min has turned up and locked in the relative positive. From that point the faster timeframes should start giving us the finer point information.

 The 1 min chart for instance is in a positive positive, if it can lead a bit further as I show with the white arrow, then we are getting started on the reversal process (U, W or V shaped).

 Next, after the 1 min locks in its divergence it needs to migrate to the next longest timeframe, the 2 min which is almost perfectly in line so a positive divergence here will be very telling. From there they should continue to migrate through longer timeframes and build on what is already there.

Since capturing the charts, the 1 min above has made that move higher that I drew in.

Also momentum charts should improve. There actually is the start of improvement on those.

 1 min momentum IWM -MACD is improving, maybe Stochastics, RSI is improving and momentum in the top window is improving. We should see that migrate as well to say the 5 min chart below.

Momentum is improving, RSI hasn't gotten any worse so it's relative positive, MACD is improving and Stochastics is the same.