Price and Indicator Analysis

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.


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.
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jangseohee QuantitativeExhaustion
Eye opening for divergence school of thought, can never be found in TA textbook!
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Zeroing in on that last exhaustion move. Using 1 min chart to find divergences with fast moves like we saw with TLT.
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Lemnos QuantitativeExhaustion
Market Up, But RSI down ... Himmm , very good signal
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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
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Here is TLT, ETF for US 20+ year bonds, which trades nearly inverse of TYX.
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what is your RSI setting?
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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.

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seine QuantitativeExhaustion
thank you :) very interesting,

Other observations when comparing RSI 14 and RSI 50.
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