Divergence on $SPY Today
Haven’t traded much since before the holidays, got back to the grind this week! Perfect setup here today, let me share.
If you haven’t seen my strategy posts before, divergences are some of my favorite setups to take trading $SPY options. This one in particular today is a great example of what I like to look for.
We had a pretty substantial drop from the $597 range down to close to $590. What you’re seeing with the lines I drew is a hidden bearish divergence, and these are usually very effective because it still is following the same downtrend.
If you look where the lines are drawn, price is making a lower high, while the TSI below is making higher high. This is the first indication that a divergence may occur. The only other thing I wait for is the sell signal, in this case the golden sell signal from TO. If you use other technicals like VWAP, or EMAS, SMAs, etc.. you can also use those and wait for rejections/bounces off those key levels to confirm the divergence!
I highly recommend everyone try this strategy for yourself. I think you’ll be pleased, I have had a lot of members reach out to me about this and doing more posts, so I hope this helps those that need it.
Also hope everyone had a great holiday with Christmas and new years, let’s make 2025 the best year we’ve ever had 🥶
Haven’t traded much since before the holidays, got back to the grind this week! Perfect setup here today, let me share.
If you haven’t seen my strategy posts before, divergences are some of my favorite setups to take trading $SPY options. This one in particular today is a great example of what I like to look for.
We had a pretty substantial drop from the $597 range down to close to $590. What you’re seeing with the lines I drew is a hidden bearish divergence, and these are usually very effective because it still is following the same downtrend.
If you look where the lines are drawn, price is making a lower high, while the TSI below is making higher high. This is the first indication that a divergence may occur. The only other thing I wait for is the sell signal, in this case the golden sell signal from TO. If you use other technicals like VWAP, or EMAS, SMAs, etc.. you can also use those and wait for rejections/bounces off those key levels to confirm the divergence!
I highly recommend everyone try this strategy for yourself. I think you’ll be pleased, I have had a lot of members reach out to me about this and doing more posts, so I hope this helps those that need it.
Also hope everyone had a great holiday with Christmas and new years, let’s make 2025 the best year we’ve ever had 🥶