QuantitativeExhaustion

Price and Indicator Analysis

INDEX:TYX   None
In this chart I used US 30 Year Treasuries weekly chart to explain how price and indicator analysis work.

I cover the basis of divergences, pullbacks, throwbacks, and exhaustion spikes.

Pullbacks (red) are seen when price and indicators such as RSI have diverged for a great length (wide divergence) or when you have weak divergence top comparing price and RSI . Throwbacks (blue) have the same effect, however show up when you have a bottom divergence or exhaustion spike.

If you notice wide divergence tops or bottoms more than often develop a stagnant price pullback/throwback. This is important to understand for timing purposes with instruments such as options.

When you have a weak major divergence top or bottom, there is usually a strong pullback/throwback occasionally surpassing the original price top / bottom.

Exhaustion spikes often happen after strong pullbacks and pullbacks that price sideways for a long duration. Exhaustion spikes are difficult to call bottoms or tops because they can lead to large price moves. To find an exhaustion bottom it is best to look on a much smaller time frame for strong angle divergences.

For TYX I am waiting to see a rapid price movement to the downside or a divergence signal with a lower bottom in price and a rising divergence indication.

Komen



Exhaustion spike Dec. 2008

Strong angle divergence on daily chart.

Normally I would cycle (weekly - daily - hourly - 30/15 min) to find a divergence signals.
+9 Balas
jangseohee QuantitativeExhaustion
Eye opening for divergence school of thought, can never be found in TA textbook!
+1 Balas


Zeroing in on that last exhaustion move. Using 1 min chart to find divergences with fast moves like we saw with TLT.
+8 Balas
Lemnos QuantitativeExhaustion
Market Up, But RSI down ... Himmm , very good signal
+3 Balas

1M Chart


2W Chart


1W Chart


1D Chart


3H Chart


1H Chart


30 Min Chart / Waiting for Overbought - Divergence Signal


5 Min Chart / Waiting for Overbought - Divergence Signal
+7 Balas


Here is TLT, ETF for US 20+ year bonds, which trades nearly inverse of TYX.
+7 Balas
what is your RSI setting?
+1 Balas
1D




Hello Seine

I use both RSI 14 and RSI 50. I use two because one will display the magnitude of an exhaustion spike much better (RSI 14) than a longer length RSI. With a longer length RSI, like RSI 50, I find it much easier to scan charts for divergences.

1H
+7 Balas
seine QuantitativeExhaustion
thank you :) very interesting,
Balas


Other observations when comparing RSI 14 and RSI 50.
+7 Balas