The following discussion took place in the Hamzei Analytics High Frequency Trading chatroom on September 15, 2009.  Names in this transcript has been changed for privacy purposes.

AFTERNOON DISCUSSION: Futures contract ESZ9 watching price increase while CI was showing negative divergence.

Tue Sep 15 2009 11:16:30 PDT> Moderator_C : keep an eye on the HFT Streamer
Tue Sep 15 2009 11:16:36 PDT> Moderator_C : look what i am drawing
Tue Sep 15 2009 11:16:43 PDT> Moderator_C : remember this is all real-time
Tue Sep 15 2009 11:17:02 PDT> Moderator_C : none of us KN OW the next tick — so to speak
Tue Sep 15 2009 11:18:46 PDT> Moderator_C : btw, TF violates the divergence setup but that darn thing is so thin and trades all over, i don’t base my thinking just on that
Tue Sep 15 2009 11:19:08 PDT> Moderator_C : now back to sigma channels
Tue Sep 15 2009 11:19:33 PDT> Moderator_C : ideally you want +1 to +2 sigmas for a rising trend
Tue Sep 15 2009 11:19:50 PDT> Moderator_C : btw, this was in our slides to the webinar
Tue Sep 15 2009 11:19:56 PDT> Moderator_C : that i attached on Saturday

This is the link to all of Hamzei Analytics webinars — please roll down to the bottom and look for Sept 12th
http://www.hamzeianalytics.com/educational_webinars.asp
I also included couple of slides as supplement to what we talked about (in PDF format).
Tue Sep 15 2009 11:20:13 PDT> Moderator_C : and we dropped here to 0 sigma line
Tue Sep 15 2009 11:25:07 PDT> Moderator_C : putting back on the BBands page with divergences
Tue Sep 15 2009 11:25:19 PDT> Moderator_C : does not mean we are going to sell off here but
Tue Sep 15 2009 11:25:34 PDT> Moderator_C : it is NOT all red hot either
Tue Sep 15 2009 11:25:45 PDT> Moderator_C : we are getting lower and lower CI readings
Tue Sep 15 2009 11:25:53 PDT> Moderator_C : with higher prices
Tue Sep 15 2009 11:26:05 PDT> Moderator_C : that should be a caution sign for all
Tue Sep 15 2009 11:26:07 PDT> Moderator_C : IMHO

Price was rising see above.

Negative divergence with CI.

So as you can see we did have a nice pullback and if you were long taking profits up into the trend and shorting there or waiting for a pullback to long again was smart based on the charts.