When the SPY makes a lower low while the 10day sum of new highs minus new lows starts to rise, the positive divergence is a clue that we should be on the watch for a trend change. This is what was happening until the 10day sum of new highs minus new lows just made a new lower low and we no longer have a positive divergence. So we have to wait for that to happen again. This "may" suggest that the market "may" not have made a bottom yet and there maybe more downside possible.
In the past divergences appear at most turns in the market. At the very least, the 10day sum of new highs minus new lows develops lower highs and lower lows at or near tops and higher highs and higher lows at or near bottoms.
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This has been posted for Educational Purposes Only.
Do your own work and consult with Professionals before making any investment decisions.
Past performance is not indicative of future results.