Here's a little vignette from this morning's action that shows a classic divergence between the Qs and the NYAD. . .and the low risk approach to these setups. . . stand aside.
Several points to note here:
The Qs open higher, retreat to the PP and then surge up quickly. The fact that the Qs bounce back up thru the PP at 9:40 negates our open fade and we are net flat.
At this point the NYAD shows a little strength, but this quickly dissipates and by 9:54 the NYAD downtrend has begun as signalled by the double MACD downslope.
The Qs continue to waffle and aggressive traders could have entered short at 10:12 with a parabolics signal trigger following a NYAD parabolics short signal at 10:00.
The Qs then run upslope again until 11:16, in clear contradiction to the NYAD slope.
Finally, at 11:18 the NYAD parabolics fire a Sell, the Qs MAs roll over and the Qs parabolics fire a Sell. With everything now in sync (finally, we enter short with the Qs PP as out first line of support and a likely cover target.
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