RSI Divergence Signals on SPX

SPX Lens marks RSI regular-divergence signals directly on the S&P 500 chart: a buy when price prints a lower low while RSI prints a higher low from an oversold extreme, a sell for the mirror image at overbought. These are rare, high-conviction prints by design — and they pass through two regime filters before they reach your chart: a VIX gate (signals stand aside when volatility is elevated) and an optional dealer-gamma gate that only allows signals in the calmer positive-gamma regime.

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Regular vs hidden divergence

Regular divergence — what our signals detect — hints at reversal: price pushes to a new extreme but momentum doesn't confirm it, so the move is running on fumes.

Hidden divergence is the continuation-side cousin, and it is widely misused. Bullish hidden divergence means RSI makes a lower low while price holds the same level or higher — momentum got washed out without price breaking, which speaks to stored energy for continuation higher. Bearish hidden divergence is RSI printing a higher high while price makes a lower high — enthusiasm without progress. The critical point: hidden divergence is not an entry signal by itself. Its proper job is adding or subtracting conviction from a setup you already have — extra confidence in a support bounce when bullish hidden divergence forms into the level, extra caution on longs when the bearish version appears into resistance.

Why "oversold" alone is not a signal

An oscillator can stay pinned at an extreme for as long as a strong trend lasts — buying purely because RSI is under 30, while sellers are in control, is how traders get steamrolled. Divergence (momentum failing to confirm price) plus a level worth defending is the combination that has historically carried edge, which is why our signals require both the divergence structure and the RSI extreme, and why the regime gates exist at all.

Tuning on SPX Lens

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