The Fed has Created the Biggest BUBBLE in History and it’s about to Pop
FOR EDUCATION ONLY
The S&P 500 and Nasdaq 100 completed major sell signals on Tuesday, October 26, 2021. They formed 9-count Sequence sell signals at that time, and consumer sentiment is warning that the US will move into recession with `18 months from last August.
Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction.
There is positive and negative divergence. Positive divergence indicates a move higher in the price of the asset is possible. Negative divergence signals that a move lower in the asset is possible.
A bearish “triple divergence” denotes the S&P500 is moving higher and three technical indicators are simultaneously moving lower.
A “price gap” is a price level on a chart where no trading occurred. A gap on a daily chart happens when the stock closes at one price but opens the following day at a different price. Why would this happen? This happens because buy or sell orders are placed before the open that cause the price to open higher or lower than the previous day’s close.
Microsoft closes at $26.57. After the close they come out with their earnings report. They report higher than expect earnings that causes excitement among investors. Buy orders come flooding in. The next day Microsoft opens at $27.60. Since there were no trades between $26.57 and $27.60 this will create a gap on the chart.
Traders say a stock is “filling a gap” or a stock has “a gap to fill”. A few days later the Microsoft stock price declined and filled in the price level at which there were previously no trades, “filling the gap”.