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Monthly Archives: September 2011

  • Economics and Technical Analysis

    Hawk’s Scan Sentry Report September 26

    Welcome to Hawk’s Scan Sentry Report. This is Sunday night with stock recommendations from Jan Arps’ Scan Sentry Toolkit for the week beginning September 26.

    This weekend the World Bank, IMF,  and global financiers met in Washington D.C. to fret over the current state of affairs of the global economic landscape. It appears that the ‘too big to fail’ banks (which are bigger now than they were in 2008) are once again looking at swallowing the bitter pill of unrepayed loans… this time in Europe. I will spare you my macro-economic rant about how the current recession/depression which is once again being reflected in the global credit markets is the logical result of the thirty year experiment with ‘Supply-Side’ (or Voodoo) economics.  Instead, let’s be practical and take a look at what effect this and the other news will have on our already volatile American markets this week?

    My guess is very little. The World Bank’s worries about the fate of the Euro, and the people whose lives are dependant on its value, are already represented by the 16% evaporation of value in the American and European markets since early July.  Usually, by the time ‘news’ hits the newswires most of that information seems to be already baked into the prices of the various markets. Did anyone notice what happened when Steve Jobs announced his resignation as CEO at AAPL… the stock went up for a week!  I am skeptical about trading the news… As we all know, the only reason prices go up or down is because there are more buyers or sellers at any given time.  The reasons persons and corporations have for buying and selling are generally rooted in either fear of losing money or perceived opportunities to make more money.

    So let’s look at some opportunities to make some more money.

    Due to the high volatility within the range-bound nature of the American markets these days, for 'long' trades I am looking to trade corrections in extremely oversold markets using the Trend Exhaustion1 and 2 tools. These trades can be perceived as ‘counter-trend’ trades, so be careful. Remember, these are short term ideas. I’m hoping to gain several ATRs while risking only one. These are not investments or even ‘swing’ trades; but opportunities which may be good for a couple of days at least.  If you don’t like betting against the trend, some of these ideas may not be for you. For 'short' trades I am turning to one of our favorite set-ups... the Pullback 23.

    Let’s take a look…..

    Hawk

    _____Longs____

    EE: note Radar 2 Price Leader (TE1) crossing out of over-sold zone with a pivot divergence, and the bullish engulfing bar at support.

    TMX: note the pivot divergence in Radar1 Fear/Greed and Radar2 Price Leader against the mid-June lows and the Trend Exhaustion 2 signal as the Radar2 Price Leader prepares to cross it's slow line.

    PGN: This looks like a potential pullback to retest its breakout level.

    ____Shorts_____

    FDS: note pivot divergence in Radar2 Price Leader coinciding with Pullback 23. Be careful, this is against  the Triple Trender!

    LBTYA: note Pullback 23 in same direction as Triple Trender.

    K: Another Pullback 23 in line with the Triple Trender. Beware of Pivot divergence in Radar1 Fear/Greed


  • Nothing Fancy

    Hawk’s Scan Sentry Report September 19

    Welcome to Hawk’s Scan Sentry Report. This is Sunday night with stock recommendations from Jan Arps’ Scan Sentry Toolkit for the week beginning September 19.

    Last week’s new Radar1 MACD tool showed a lot of promise. By the end of the first day of the week, 5 of the7 stocks we were looking at showed a profit, and by the end of the week  MRVL, MU, and SNDK were all showing profits between 9-10%.

    This week I used the TTB Pullback 23 tool as the primary criteria in my weekly scan.  The settings were Treble-3, Bass-9, Tempo-21, Chromatic-2 looking at daily data. Here are a couple of the stocks it showed as potential trading opportunities….

    _____Long_____

    NNN

    _____Short_____

    RNR

    May the trend be with you,

    Hawk

  • A Primer on the Fear/Greed Indicator

    Hawk’s Scan Sentry Report September 12

    Welcome to Hawk’s Scan Sentry Report. This is Sunday night with stock recommendations from Jan Arps’ Scan Sentry Toolkit for the week beginning September 12.

    Today I want to talk about the Radar1 Fear Greed indicator and how we use it to find potential trading signals. This is one of our most popular tools because of it's efficacy in demonstrating the strength of the buyers and sellers. One of the most common signals we like to look for is divergences of peaks and valleys between the indicator and the price. Another signal we look for is when the Fear/Greed indicator crosses above or below its zero line. We can also set the Radar1 alert threshold to the value of the indicator’s previous peak or valley and look for a cross of that threshold. Sometimes we also draw trendlines on the indicator's peaks and valleys and look for signals when the Radar1 value crosses that trendline. In trending markets we like to look for the Fear/Greed histogram bars to get longer again after they shorten up in a pullback.

    But right now the American stocks are not in a trending market. In general, the stock index futures contracts appear to be in a state of consolidation. This weekend the S&P index is pretty close to the middle of its current trading range (which by my reckoning spans approximately 1105-1220). So, this week I’m interested in finding a way to use the Fear/Greed indicator to identify stocks which are experiencing increased buying or selling pressure. The Radar1 Fear/Greed indicator is the ideal tool for this because it gives us insight into whether the bears or the bulls are strengthening their grip on the markets in question. But how do we identify this condition?  This week in order to identify the relative strength of the Radar 1 Fear Greed indicator,  I created for myself a modified tool which calculates a moving average of the Fear/Greed indication, and then identifies a signal when the strengthening or weakening Radar1 value crosses it’s own moving average.  For the time being I’m calling this custom tool my Radar 1 MACD indicator.

    If my Radar1 MACD does as well as last weeks custom Radar 2 “auto OB-OS” tool I’ll be encouraged. By the end of last week, the new tool I created showed profitable indications on five of the seven stocks  identified in last weeks report; with YONG gaining 7.5 % on a long position and ATK showing better than a 4% profit with a short signal.

    But remember, this is an untested tool, so I would recommend extreme caution as you are making your trading decisions. I am bringing this new tool to your attention  as an example of one of the myriad ways you can use the versatile Arps indicators to help identify potential trading set ups.

    Let’s see how she does…

    Longs_______Shorts

    MRVL              KT

    MU                   TTM

    SNDK               BCSI

    YHOO

    May the trend be with you,

    Hawk

    _____Longs_____

    _____Shorts_____

  • Dynamic Over-bought and Over-sold Zones

    Hawk’s Scan Sentry Report September 6

    Welcome to Hawk’s Scan Sentry Report. This is Sunday night with stock recommendations from Jan Arps’ Scan Sentry Toolkit for the week beginning September 6.

    Today I want to talk about the Trend Exhaustion1 (R2) indicator. As many of you may know, the Trend Exhaustion1 tool is based on the Radar2 Price Acceleration oscillator, also known as the Arps Price Leader. If you have experimented with the TE1 tool at all, you know that you can use it in two different ways. It can either mark an exit from an overbought or oversold zone, or it can mark a cross of the fast and slow lines. Well, there are advantages and disadvantages to both of these approaches. If you use the overbought/oversold cross you will get fewer signals but, in order to set the OB-OS zones, you must know what the extreme ranges of this unbounded oscillator are for whatever market you are looking at.  If you use the fast/slow cross you will get a very timely signal; but, because the Radar2 Price Leader is so sensitive,  you have to filter out a lot  of the crossing signals to find the trend exhaustion indication which you want. Well, one solution is to scan your list of stocks using the TE1 tool applied twice, and in that way you can find symbols which fulfill both criteria at once. This should filter out a lot of the unwanted signals and just show you the Radar2 crosses around the overbought and oversold zones (which are the ones you typically want). Well, there is still one problem…. because the  Radar 2 Price Leader is an unbounded oscillator, the overbought and oversold zones vary from instrument to instrument.  If you want to use a scanner to monitor for OB-OS crosses you would have to readjust the OB-OS zones for every symbol. In order to overcome this obstacle, tonight I made myself  a custom TE1 scanning indicator which looks at every major peak and valley in the Radar2 oscillator and averages the highest and lowest 10 in order to set a dynamic overbought and oversold zone for any market.  These 'dynamic' zones will allow the indicator to change and adapt to the market as the market itself influences this unbounded indicator.  When I run this modified TE1 indicator through a spreadsheet application or a scanner, I am able to let every symbol set its own overbought or oversold zone. Consequently I can get much more timely and significant signals. Here is an image of the custom tool applied to a spreadsheet and a chart.

    Using daily charts for my stock scans,  the only results I get with this tool right now are bearish. Consequently I’ll use other indications to try and find any potential buying opportunities this week.

    To those of you who attended last Thursday’s webinar which presented  some of our best selling tools on the Ninja Trader platform, once again thank you. We will try and post a video of that presentation on our website soon. Of course, you can at any time get some good instruction on how to use some of  Jan Arps’ tools from our YouTube videos which can be accessed from the ‘videos’ page of our website.

    So, without further ado, here are the stocks that our indicators are recognizing as potential trading opportunities this week. In these volatile times, stock trading becomes trickier and riskier. Please, never risk more than you can afford to lose.

    And now for this weeks stock recommendations….

    Longs_______Shorts

    IEF                  SYKE

    YONG             SFSF

    UL                   ATK

    .......................SBNY

    May the trend be with you,

    Hawk

    SHORTS

    LONGS

4 Item(s)

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Full Risk Disclosure

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