Wednesday, February 4, 2009

Wed. 02/04/09 - Tick Divergence Setup

I didn't watch the market in the morning, but was talking to Matt on Yahoo later in the afternoon so pulled up the charts. I spotted a TICK divergence setup with a negative TICK extreme bar firing off right before the spike up from the 828 area. Very nice setup that was good for at least 3-4 points, even with a delayed entry. I started taking screen shots of the 1-minute ES/TICK chart to document the trade setup. Here they are, in sequence:

ES/TICK (1-min) 1:30 PM (central time)

ES/TICK (1-min) 1:33 PM (central time)

ES/TICK (1-min) 1:39 PM (central time)

ES/TICK (1-min) 1:58 PM (central time)

ES/TICK (1-min) 2:41 PM (central time)

I think the charts speak for themselves. The TICK divergence is pretty obvious, and worked out great in the afternoon. We also got a gap fill before 1 PM (central).

Gap Filled at 12:55 PM (central)

ES/TICK (3-min)

ES Market Balance (5-min Continuous Contract)

ES Market Balance (5-min Day Session Only)

TF Market Balance (5-min Day Session Only)

TF/TICK (3-min)


  1. So how would you have managed that position? Target a VWAP or another resistance zone above? Or just aim for 4pts or something?

  2. I think price was around 827 when I saw the divergence, so assuming I could get in @ 828, my initial target would have been 831.50 (previous close - 1 tick) which was the next area of resistance. After that, the next area of resistance would have been the 34 EMA on the 5-min chart, which was around the 835 area at that time.


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