Quantifying Divergence with the Divergence Index by Matt Storz
ARTICLE SYNOPSIS ...NEW TECHNIQUES
With The Divergence Index
Divergence, a popular technical term used to denote a market movement in one direction when a technical indicator fails to follow it, can forewarn of a reversal in market direction. However, divergence has been difficult to quantify. Here's one software engineer's approach to tracking divergence. By Matt Storz
Divergence between market prices and an indicator applied to those prices can provide a strong signal of an
impending price reversal. For example, when prices make new highs but the indicator does not, an important market...