GOLDBUGS AMEX Goldbugs Index (GOLD)

[CaribbeanJim]

toco - Let me share with you one thing that mvpsignalsystem shared related to divergences. It applies to gold and silver too.

One reservation about divergance. Most oscillators have a fixed time frame that is a 'best general fit' to market movements.

However, when you get in situations where the movement of the item being charted is substantially longer or shorter than the fixed time frame of the indicator, the indicator will show divergence.

The indicator divergence may not be as meaningful if its trying to argue with a longer than normal move or a greater than normal downswing, like lately.

Not every meaningful index movement will match itself to the fixed oscillator time frame. Thus the divergence shown may be mathematical, more than anything.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=27679511