Just because there exists a divergence doesn't mean price can't continue higher. A perfect example of that today in the SPY and the NYSE TICK.
Sorry for the busy chart. As an aside, the first highlighted region on the TICK chart was not a divergence. What followed, were TICK divergences, which led to subtle price pullbacks but ultimately continued breaking out. Notice how TICK held the zero-line on each pullback.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.