Swing divergence setups...

Last week ended with weaker than expected US jobs data which added more prospect to more QE3. Subsequently the US dollar fell on the back of the news and was further strengthened from end of week short covering. However, the US stock market, which is a good barometer of market sentiment (due to it being classed as a risk based asset), such as the S&P500 has put in a swing divergence setup. This is also the case with the Euro; we now have a key reversal day (also known as an engulfing bar) with divergence on various oscillators on the 1.272 Fib extension (which is a common reversal area). Whilst there are many pairs at potentially strong reversal levels with divergence it is important to think about portfolio risk and always know how much you would lose if you get stopped on all your trades. This discipline is imperative to become a long term successful trader. It is also important to distinguish between a trend reversal or a short covering retracement. The results of the closed Greek elections on 17 June could be a game changer. Some interesting charts I'm looking at: