Price and Indicator Analysis

In this chart I used US 30 Year Treasuries weekly chart to explain how price and indicator analysis work.

I cover the basis of divergences, pullbacks, throwbacks, and exhaustion spikes.

Pullbacks (red) are seen when price and indicators such as RSI have diverged for a great length (wide divergence) or when you have weak divergence top comparing price and RSI. Throwbacks (blue) have the same effect, however show up when you have a bottom divergence or exhaustion spike.

If you notice wide divergence tops or bottoms more than often develop a stagnant price pullback/throwback. This is important to understand for timing purposes with instruments such as options.

When you have a weak major divergence top or bottom, there is usually a strong pullback/throwback occasionally surpassing the original price top / bottom.

Exhaustion spikes often happen after strong pullbacks and pullbacks that price sideways for a long duration. Exhaustion spikes are difficult to call bottoms or tops because they can lead to large price moves. To find an exhaustion bottom it is best to look on a much smaller time frame for strong angle divergences.

For TYX I am waiting to see a rapid price movement to the downside or a divergence signal with a lower bottom in price and a rising divergence indication.
analysisangleDivergenceexhaustionTechnical IndicatorspricepullbacksRelative Strength Index (RSI)spikesthrowbacks

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