Divergence – Trade Analysis for Apr-10-2014

NQ displayed divergence at open from YM and ES.  Internals displayed buying pressure (+600) and sell offs were shallow.  BUT NQ and NQ spreads (NDD) were showing divergence from rest of the instruments.

Divergence in Instruments :  If there is divergence in one of the instruments, this will take priority over market internals. There is a very high probability for market to follow the divergence.

Observe the High ES made pointed by red arrow.

NQ Made a much lower high – Divergence

TICKS were showing lack of selling and more buying – upside bias during the first 30 min trade.

Observe the divergence in spreads. NDD was showing weakness while SPD and ADD (NYSE) were showing strength. Eventually market followed the divergence in NQ.


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