Hi David!
As it seems, the black line reacts faster. When the asset moves up or down, the black line reacts faster compared to the blue line. This implies that the black line will be above the blue line when the asset increases fast in value, and when the asset declines rapid in value, the black line falls steeper and naturally falls under the blue line. This also implies that a gap always exists naturally.
Honestly I dont really understand how this can be used as a trading tool. Some how the goal must be to predict the outcome of the underlying asset, but how is that possible?
The only way I can see how EMA and MACD can be used is to analyze the gap. When the gap shrinks its time to sell or buy, and preferably before the lines crosses each other in order to not run the risk of buying/selling too late. Am I correct?
Best regards!
/Fredrik Magnusson