Today started with a four point gap on the Russell, and it looked like we were on our way down. The first pullback gave a reasonable Stochastic entry, but reversed after two bars. Fifteen minutes later there was another potential short, this one accompanied by a nice Stochastic DIVERGENCE. I took the first entry and passed the second. I know that second entries are often necessary to catch market moves, and sometimes I even convince myself in time to take the trade.

If it doesn't work the first time

There was another potential entry (long) just before 9 am Pacific time (lunchtime back East.) I can see it as another divergence now, but it was not strong enough to convince me at the time. To take a divergence trade I want a strong pattern, or for the divergence to be the confirming factor on another trade entry.

Notice the yellow line drawn half-way between today’s high and low. On a do-nothing day the market will often set a range and then spend the rest of the session oscillating around the center point.

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