Sign up for tips & tools and receive a free scanning tool!
 

The right tool for the job. If we don't have it, we can make it!

Monthly Archives: February 2012

  • Reading Market Psychology Between the Lines

    Hawk’s Scan Sentry Report February 27

    In this post I want to share with you how I read between the lines when I look at a price chart. There are many ways people have found to draw trendlines.  I will show you what I have found to be the most effective method. In order to draw an up-trendline, first identify the most recent valley on the price chart and then identify the next most recent valley of the same magnitude whose nadir is lower than the most recent nadir. If there is no lower valley over the lookback period, then the up-trendline is a horizontal line at the lowest low. The opposite is true for down-trendlines.

    Trendlines represent significant points of support and resistance, not just for aesthetic reasons on a chart but because they truly show us the price points where significant buy/sell decisions are made. Often you will notice that price will oscillate back and forth across a trendline for several bars. That's because this is often the “line in the sand” where the traders find their trading opportunities. You see, the slope of the trendline represents the ‘average speed’ at which a stock is moving, the higher the slope the higher the speed. When the price crosses the trendline it means that the price may no longer move at the same speed or even in the same direction. This offers opportunities for entering or exiting a trade and is often the battlefield where the tug-of-war between the bulls and the bears takes place.

    There are several distinctly different types of trend-line signals. A cross above a down-trendline is a bullish breakout which signifies 'hope' for the future of the stock.            A subsequent cross back below that line is a failed test of  the breakout and represents insufficient energy from the bulls. This could be a bearish pullback opportunity. A cross below an up-trendline is considered a bearish breakout and represents pessimism toward the future price; however a cross back above that up-trendline is seen as a bullish pullback opportunity… These signals are very useful and become even more effective when divergence analysis is included to qualify the signals.

    Here are a few stocks that I’m looking at this week which  show trendline signals. I’ll demonstrate one of each type. If you have any questions about any of the other tools shown on the charts below please follow this link .

    _____Longs_____

    Bullish Breakout - FTE

    (Note the cross of the value of the previous peak in the Radar1 Fear/Greed Indicator preceded by a  Bullish pivot divergence . Also, note the recent bullish indications of The Triple Trender and Radar 3 Trend Strength Index).

    Bullish Pullback -LHO

    (In addition to the trendline pullback, we have a Trend Exhaustion1 signal and a Pullback 23 signal. Nice pullback into the long-term Trender as well ).

    _____Shorts_____

    Bearish Breakout - SWY

    (This breakout signal was preceded by a nice bearish divergence in the Radar 1 Fear/Greed indicator and the Radar2 Price Leader. We also now have all three Trenders bearish and the first bar of a bearish Radar 3 Trend Strength indication).

    Bearish Pullback - GPC

    (This shows a failed test of the horizontal downtrend line at the same value as the uptrend line. All three Triple Trenders just went short, the Radar3 Trend Strength indicator just went short, and we have a bearish divergence in the Radar1 Fear/Greed indicator).

    Here is an example of the scanner I use to find the trendline signals.

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment adviser or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial adviser and their tax adviser to determine the suitability of any investment.
  • More Upside than Down

    Hawk’s Scan Sentry Report February 20

    The bulls seem to be driving the American equities train right now, and they appear to have a full head of stem.  The markets are making new highs and the economic data for the US economy appears to be improving. As noted in this publication several weeks ago, I am still quite bullish on American equities for the long term (6 months-1yr) but I will be prepared for short term bearish positions (several days) as the market presents such opportunities. Here are a few stocks that I am looking at this week.

    For those of you who follow these reports regularly and study the charts, you may notice that this week I have added an automatic trendline indicator to the charts which draws the most current up-trendlines and down-trendlines and plots a dot when trendline breakout and pullback signals occur. If you have any questions about what the other indicators on these charts are showing you please click on this link for an explanation of each of the tools displayed.

    Now, here are some stocks that I’m watching for trading opportunities this week…

    _____Longs_____

    TAP

    (I like the combination flag breakout and trendline breakout resulting in the resumption of the bullish Triple Trender).

    BX

    (After a pullback to the breakout price which is now support, note the Trend Exhaustion 1 OverSold signal along with the Pullback 23 signal at a pullback into the Triple Trender).

    _____Shorts_____

    PMC

    (A nice Pullback 23 into a bearish Triple Trender near the down-trendline).

    CLF

    (Radar1-Fear/Greed  and Radar3-Trend Strength have both just turned bearish along with the Triple Trender following a bearish Pivot Divergence. I expect it to test the lows around $57.00).

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Getting High on the Market

    Hawk’s Scan Sentry Report February 13

    As predicted several Scan Sentry Reports ago the S&P 500 futures contract broke through resistance at 1330 and then quickly raced to test the next resistance level at 1350 (please see “Finding Divergences the Easy Way” Jan 16). We have pulled back from that level and 1330 is now support. After examining historical recoveries from previous market crashes I expect the S&P to eventually break through 1350 and enthusiastically test new highs.   Of course it could just as easily go down; the market doesn’t care what I expect. That’s why I always try to be prepared in my short term trading for a full gambit of possibilities.

    Not surprisingly  on many of the charts I’m studying this week I’m finding new highs. Therefore, in this report I will endeavor to demonstrate how I discriminate between what I perceive as failed highs which represent shorting opportunities and new highs which may be breakouts from congestion with bullish potential.

    My primary tools for culling out failed breakouts are divergence analysis using the Radar1 Fear/Greed Indicator and the Radar2 Price Leader. I also look for signals from the Arps Trend Exhaustion tools. For potential bullish positions I like to see strengthening Radar1 Fear/Greed and acceleration in the Radar2 Price Leader and/or a bullish Pullback 23 signal. The Triple Trender must be bullish as well.

    Here's an image of the Radar-Screen I use to sort my scans for trading set-up.

    Let’s take a look at a few stocks that are on my watch list this week and I’ll show you what I mean….

    _____Longs_____

    ATW

    (In this one we see a nice Pullback 23 coinciding with breakout to new highs after a recent pullback into the Triple Trender).


    EFX

    ( Another breakout to new highs after a consolidation period in which the Radar1 Fear/Greed Indicator showed a lot more buying than selling . Radar 3 Trend Strength shows that we are already in a strong and sustained uptrend ).

    _____Shorts_____

    RAS

    (Although this one also made new highs, Please note the Trend Exhaustion2 signal one bar ago combined with a Bearish divergence in both Radar1 Fear/Greed and Radar2 Price Leader).

    SYY

    (A synchronized Bearish Triple Trender after  bearish divergences in both Radar1 Fear/Greed and Radar2 Price Leader. Also note that the Radar3 Trend Strength has just turned bearish).

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Early Trend Identification

    Hawk’s Scan Sentry Report February 6

    Today I want to show you another set-up I like to look for, and offer a few examples of it from current charts.  To find the early identification of a bullish trend I look for the Arps Triple Trender to turn bullish (below the price) on all three Trenders and combine that signal with a cross above the zero center-line of the Radar3 Trend Strength Index. It’s pretty simple really. The Triple Trender identifies the orientation of the trend across three different abstract time-frames; while the Radar 3 Trend Strength Index confirms the direction of the trend and identifies the strength of it. This works even better when supported by a divergence in the Radar1 Fear Greed Indicator or the Radar2 Price Leader. You should put your stop on the outside of the long-term Trender because the price will often pull back into the short-term or medium-term Trender before really moving in your direction with conviction .  This is a good set-up in both bullish and bearish directions…. But the markets are so bullish right now that it is currently a bit difficult to find this set-up as a short-selling signal.

    I am currently bullish on the medium and long-term orientation of the American markets these days for reasons political and historical as well as technical.  But, as always, I am preparing myself with trading options in both directions. Here is a sampling of a few that are on my watchlist this week with examples from the set-up described above.

    _____Longs_____

    MA

    (A good example of the set-up described above. Note the divergence in the Radar1 Fear/Greed Index before the breakout).

    CDNS

    (Here’s one that shows the Triple Trender and Radar 3 signal nicely. I expect it to pullback to resistance around $10.80 and fill the gap  ).

    KSS

    (This one is NOT confirmed by the Radar 3 Trend Strength Index as described above, but is a bullish Triple Trender preceded by a very nice divergence ).

    _____Shorts_____

    KMX

    (Here’s a bearish example of the set-up described above. As it is already close to resistance at $29.50, I would still look for a pullback into the Triple Trender for a good entry price).

    LINE

    (Here’s a pullback into the short Trenders with a newly bearish Radar3 Trend Strength signal. Note the Radar2 Price Leader crossing under its center-line while the downward pointing blue bars of the Radar3 Trend Strength tool show a pullback indication).

    NEM

    (I like the Pullback 23 signal in the downtrend here ).

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.

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

make up wisuda make up jogja prewedding jogja prewedding yogyakarta berita indonesia