Wanting A Failed Divergence Trade Or Skipping This Afternoon

Welcome back everyone! Let’s give you a special mid-day update for today.

Typically after a big move you will get tighter consolidation. The market is pausing today at this point. I talked to you about the negative divergence that was taking place before. That is where we have a higher high in price, and a lower high in the indications. We ended up pushing through those. That is somewhat of a precursor to what I was explaining about. I would like to see more follow through. Failed divergences could easily lead to more follow through moves. We are due for a pull back. We also have a negative divergence still at this point. We are making a higher high on the NASDAQ and lower highs on the indications.

The RUSSELL has made higher highs in indications. The DOW and S&P have been pushing through a failed divergence. I really want to see follow through on this. I want to see fresh explosions and fresh buy signals.

I have been talking about the 240 level on Goldman Sachs.  We had some nice stochastic buy signals after a pull back. This also tied in very well with my institutional signals. You can see all three buy signals fired off here. There was even a stochastic spike buy signal. It ended up going right through the 240 level. You obviously saw the end result on the markets. When we broke through the 240 level, nice things happened. Once we get above the new resistance levels on the daily and weekly charts there could be more clear sailing. 245 was the real new level to beat. I would love to see Goldman Sachs beat the 245.50 level. That could help fuel the failing divergence I was telling you about. That would be my favored trade at this time.

I would be very cautious on shorts right now. It happened a few minutes ago in the Live Trading room. It looked like the NASDAQ was going to be turning around. I told the students in the Live Trading Room that I wasn’t going to fall for that. That head a quick whoosh down to catch retail traders. It ended up turning right back around. We’re talking about 15 points from bottom to top. That is around 3 times the retail trader stop loss. This went up about 15 points. That is why I am not falling for shorts right now. We are above the daily speed lines. The RUSSELL is currently the weakest right now. I want continue to look for continuation long side trades. That will be the key heading into this afternoon.

We have heard all the jaw boning on Iran controlling the Strait of Hormuz. Crude Oil jumped about 400 ticks in 2011 when they started blocking ships. We have barely moved during this recent conversation. I am watching that very closely because the news isn’t making this go up. I will be keeping an eye on this.

There are lots of things to look at. Don’t forget that this is one of your last chances to sign up for tomorrow’s special class. I will be kicking that class off tomorrow. I am going to show how I take insider trading activity and how I use that with my inside strategies. If you go to www.becomeabettertrader.com/insider you can sign up! I look forward to seeing you guys there!

I hope you have a great night and I look forward to seeing you all in the session tomorrow!

To learn more about Rob Hoffman Trader visit www.becomeabettertrader.com

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