SPY AND DIVERGENCE

SPY RSI shows overbought conditions on the monthly with bearish divergence for the first time since the last bear market

To negate this SPY price would need to push MUCH higher and hence go into new overbought territory

SIMPLE PRICE ACTION/ DIVERGENCE tutorial

Is price/momentum bearish? LOOK AT THE HIGHS

1. if price is making lower highs: that's bearish, and we'd expect the indicator to follow (see 3)
2. if price isn't making lower highs BUT the RSI is: that's bearish
3. If price is making lower highs and the indicator is making higher highs this is HIDDEN BEARISH divergence

Is price/momentum bullish? LOOK AT THE LOWS

1. if price is making higher lows: that's bullish, and we'd expect the indicator to follow (see 3)
2. if price isn't making higher lows BUT the RSI is: that's bullish
3. If price is making higher lows and the indicator is making lower lows this is HIDDEN BULLISH divergence

*trade at your own risk*