QUESTION 12.1   R US Daily MACD (12, 26, 9)

1. Identify at least two turns the MACD caught with momentum divergence.
2. Identify at least two turns the MACD missed.
3. Circle an instance of a plateau on the MACD.
4. Can you circle an instance of overbought or oversold?

QUESTION 12.2   BIDU Daily with MA Oscillator, Blue (5, 15, 1), and MACD, Green (default)

1. Is there an easy way to tell the MAOsc from the MACD?
2. Why?
3. On the MAOsc, identify a valid divergence with a tolerance of two bars.
4. On the MACD, identify a valid divergence with a tolerance of two bars.
5. Find an instance where there are two valid divergences with the same starting peak.
6. Find a divergence the MAOsc missed altogether.
7. Find a divergence where the MAOsc was “off tolerance,” using a tolerance of two bars.
8. Find a flat divergence. Which indicator is it on? Is it bullish or bearish?

QUESTION 12.3   Oscillators

1. How was the Ultimate Oscillator a breakthrough or precursor indicator?
2. What techniques do Kase's momentum indicators use to improve upon this idea?

QUESTION 12.4   WAG 60M Kase Bars with KaseCD (Slope Filter Off, Otherwise Default Settings)

A tolerance of “2” means that a price peak may take place two bars before or after a momentum peak. The questions are all based on a tolerance of two bars.

1. Identify two overbought and/or oversold signals.
2. Why isn't the “divergence” shown in blue valid?
3. Why isn't the “divergence” shown in black valid?
4. Draw in at least four valid divergences. Make sure at least one is bullish and one bearish.

QUESTION 12.5   XAU Daily with KaseCD (Tolerance 3, Otherwise Default Settings)

Note that a dotted divergence line, a new improvement to Kase's momentum indicators, means the confirming price bar closed in the opposite direction, for example down for a bullish signal.

1. Assume a stop and reverse (SAR) system where (short exit) long entry = two closes over the upper channel, and (long exit) short entry = two closes below lower channel. Draw black up arrows for the first signal, and black down arrows for the latter.

   Now add the following exits: On a dotted KCD divergence, exit if prices touch the opposing channel, upper channel to exit short and lower channel to exit long. Exit on a standard KCD divergence or OBOS signal.

2. Mark any exits or trades that made a profitable difference with blue arrows, and describe the reasons for the difference.
3. Mark any exits or trades that caused a negative difference with red arrows, and describe the reasons for the difference.
4. Circle any instances where the added exit rules made no difference, and explain why.

QUESTION 12.6   K Daily with Kase Peak Oscillator, No Annotations

1. Note any overbought or oversold signals, called PeakOuts, by marking a “P” above a bearish peak and below a bullish peak. Explain how you decided on these points.
2. Draw in any valid divergences, using a tolerance of three bars.
3. Show two incorrect comparisons. These would be two price and two momentum peaks that should not have been evaluated. Explain why.
4. Find a correct comparison that was nondivergent. Mark with black lines and explain why the comparison was valid.
5. Mark any PeakOuts or divergences that would have been very helpful in identifying turns with blue arrows. Explain.
6. If they were only modestly helpful, mark with black arrows. Explain.
7. If they were overly sensitive, mark with red arrows. Explain.
8. Find a turn that was not identified by the Kase PeakOscillator.