Integrated Technical Analysis
fIgure 27.42 Single Oscillator MTF Agreements on the Hourly GBPUSD Chart.
Source: MetaTrader 4Figure 27.43 depicts multiple oscillator STF agreements comprising RSI,
MACD, and ROC on the daily Apple Inc. chart. Notice that all of the oscillators
tend to give almost identical bullish and bearish signals. Notice that all three os-
cillators displayed standard bearish divergence simultaneously. To avoid multicol-
linearity, use oscillators constructed from data other than price alone.Intermarket and broad market–price Confluences
Exogenous information and data that may also be gleaned from other sources for
additional evidence of an expected market top or bottom include:■ (^) Broad Market and Market‐Breadth Action
■ (^) Intermarket Action
■ (^) Sentiment and Flow of Funds
Commitment of Traders (COT) reports, polling sentiment (Market Vane, In-
vestors Intelligence, etc.), CRB index, bond activity, VIX, Put‐Call Ratios, Bullish
Percent Index, diffusion index, and yield curve behavior are among the popular
sources of market information.
Figure 27.44 shows the decline in the daily EURUSD when the Net Com-
mercials and hedgers turned long in April 2012, accompanied by reverse bearish
divergence between the Money Flow Index and exchange rate. Information on the
Net Commercials was obtained from the COT weekly report.
Figure 27.45 depicts sentiment agreement comprising the S&P500 Bullish
Percent Index and MACD on the daily S&P500 chart. Note that a bearish diver-
gence signal arises from indicators that use very different data, which helps reduce
the adverse effects of multicollinearity. Every time the Bullish Percent Index tests it
historically overbought level, the market tends to correct or reverse.