There is hidden divergences on indices 180-minute chart this morning indicating a potential to move up.
Hidden Divergences on Indices
On the YM, NQ, and ES 180-minute chart, the Stochastics is oversold but also hidden divergence. The markets did not make a lower low in price but did make a lower low in the Stochastics. This is typically an indication that the market will move in the opposite direction (upwards).
Additionally, the ES has formed a blue congestion area (blue ATR and white congestion dots). It may test the ATR at 2627 but with the 180 being oversold, expect price to move up today.
The ATR on the 45-minute YM chart is above price (red) and price is currently testing it. The key here is whether it has the strength to flip the ATR to blue.
The NQ 45-minute is very similiar to the YM. The ATR is above price (red) and price is currently testing the ATR.
The only index that has not formed hidden divergence is the Russell 2000. The Russell 2000 is not oversold nor is there hidden divergence on it.
Even with the hidden divergences on indices using the Stochastics, watch out for the ATR on the 180-minute chart on the YM, ES, and NQ as it is above price and may provide resistance if price does begin to move up.
Additionally, if the hidden divergence fails, typically it will result in a strong move to the downside as buyers were given the opportunity to enter and chose not to do so.