That bullish divergence is now fully matured (here are the SPY video and QQQ chart when it was just breaking out)!
So, now that the oscillator is at the ‘extreme overbought’ zone, isn’t it suppose to bearish??
Normally it would be, at least in the short-term; but when I see a price-action like today it really reminds of the November-December of 2023.
SPY DAILY BARS
So check out the setup during the late 2023:
- Bullish divergence ✔️
- Oscillator stretches ALL THE WAY to the top of its band ✔️
- Price continues to rise ✔️
Here, today, all of those things are happening right now with the bullish divergence, oscillator stretching all the way, and the big gap up to go with it (see red arrows)!
What happened back then, was the oscillator stayed at the top of its band (I call it the, “levitation mode“) while the price continues to rise higher without a meaningful pullback.
If bulls can protect today’s up-gap (at least 50% of it; but it is best if it is FULLY sustained and not even retested), we may see something similar to the November-December 2023 action.
