If you been trading for a while you know that divergences are…

A divergence occurs when the market doesn’t behave in the same way oscillators do.

Let say the market makes a higher high (or a lower low), but the oscillator (RSI, CCI, Stochastics, etc) fails to make a similar high (or low)… that’s a divergence.

The idea is that, since the indicator doesn’t agree with the market, “something” might happen, like a major reversal, consolidation period, etc.

So here is what I think…