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Monthly Archives: September 2012

  • No News is Good News

    Hawk’s Scan Sentry Report September 24

    Since the big up move after the FOMC announcement about 10 days ago the markets seem to be waiting for some other significant impetus to move one way or the other. For the past week we have seen mostly consolidation.  I have heard some say that the longer the market stays at a new price level, the stronger the indication that traders accept that level as fair value.  As I have said many times in 2012,  I believe that through the end of the year the path of least resistance is upwards. But for the coming week I am not so certain. We could easily see a pullback down to the support levels at 1435 or 1422 in the S&P Index; or we could see a move in the direction the next upside goal around 1525. Here’s where the American markets stand right now.  The S&P futures contract, though down 6 points on the week, shows no signs of significant weakness yet.  The Nasdaq contract is making higher highs but is showing some divergences in the process. After going sideways all week, the Dow Jones futures contract had a breakout day on Friday, and the Russel contract also tested  new highs earlier this week. Gold is at a 6 month resistance level so it may slow down for a spell from its bullish rampage. Although the Euro has been declining this week, the technical analysis indicates that the worst may be behind us for a little while.  Note the bullish pivot divergences with the Radar1 Fear/Greed indicator leading into August. Look to re-enter long around the 1.2740 level.

    When I’m trading American equities I like to look at both long and short possibilities in order to be ready to trade with the market whichever direction she decides to go.  Below are some charts of some of the symbols that I have identified this week for my weekly trading watchlist. Each contains a little explanation of the analysis visible on the chart. If you have any questions about the indicators on these charts please follow this link to a legend describing these tools.

    _____Longs_____

    DISH

    (This is a pullback trade identified by the oversold Trend Exhaustion 1 signal. I like that this is occurring at the uptrndline after a pullback into the Triple Trender. It also looks like there may be Pullback 23 setting up. )

    CYS

    (This is a bullish Pullback 23 signal after a retracement to the breakout price )

    _____Shorts_____

    PPS

    (A breakdown from the up trendline. A break below the previous Radar1 Fear/Greed lows. A bearishly synchronized Triple Trender, and a fresh bearish indication from the Radar3 Trend Strength Index. )

    KO

    (Here we see a bearish Pullback 23 concurring with a pullback into the down trendline).

    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.
  • QE3: It's our Duty to Trade It!

    Hawk’s Scan Sentry Report September 17

    We all watched as the equities markets raced to new highs anticipating and responding to both the FOMC announcement on Thursday and the recent political and ECB developments in the Euro currency ‘crisis’. It is obvious that the force behind this recent leg of the current rally is neither technical nor fundamental; but simply the expectation of a continued supply of  free money for the bankers to inject into the financial markets. This drives the market up because the batch of fresh money creates more demand to buy the 'securities' we trade. As traders of the markets this is really a gift for meant us. It is ironic that the justification for QE-3 is the threat of run-away unemployment. We all know that pumping money into financial markets does not in and of itself create a single job unless you are a trader, which I assume you are if you are reading this blog. No typical employer is likely to employ any new employees until there is a demand for their products or services which cannot be met by the current staff. Therefore, the ‘job creators’ are not the employers. No, the job creators are the consumers who create demand for products. Consequently, as this infusion of ‘cheap money’ finds its way into the financial markets, it is our duty as traders to do our best to decentralize this wealth from the accounts of the large banking corporations into our own private accounts and thereby introduce it into the economy of middle-class people. Ours are the only jobs that are really given a boost by QE-3. Let’s do our best to take advantage of this golden opportunity, no this patriotic responsibility, to be the ‘valve’ that helps this wealth trickle down into the supply and demand based economy of natural persons. We need to use our trading skills to skim off as much of this QE3 money as we can; and we’re going to need some good market analyzing techniques to do this.

    One of the ways I do my part is through my ‘mini-swing’ trading of equities. I like to look at both long and short possibilities in order to be ready to trade with the market whichever direction she decides to go.  Below are some charts of some of the symbols that I have identified this week for my weekly trading watchlist. Each contains a little explanation of the analysis visible on the chart. If you have any questions about the indicators on these charts please follow this link to a legend describing these tools.

    _____Longs_____

    OZM

    (This is a breakout trade from the down trendline and from a pullback into the Triple Trender. Our target is the resistance level around $10.86)

    DDD

    (This is a bullish pullback trade combining signals from the Trender Pullback tool and the Trend Exhaustion 1 indicator.  Also note the ‘Pullback Divergence’ with the Radar2 Price Leader. )

    _____Shorts_____

    DAL

    (Here we see a bearish Pullback 123 which combines a Trend Exhaustion 1 signal with a Pullback 23 signal. As is often the case this setup also identifies a Pullback Divergence).

    HTLD

    (Another bearish Trend Exhaustion 1 signal; again creating a divergence with the Radar 1 Fear/Greed indicator. )

    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.
  • The Rise of Fall

    Hawk’s Scan Sentry Report September 10

    If you like to trade breakouts on volume then this is a good week for you. There are a lot of them firing off right now.  On the other hand, finding bearish setups to trade this week is a bit of a challenge, but not impossible. Last week’s explosive rally swept through most of the buy-stops that were anywhere near the previous highs leaving only the most steadfast bears grudgingly holding losing positions.  Nonetheless, I do expect to see a pullback sometime this week to the breakout zone between 1400 and 1420 in the S&P index fueled to some extent by short term profit-taking before the market has the opportunity to race much higher. Now that many of the traders are back from summer vacation I will be looking closely at the Radar1 Fear/Greed tool to see if there is significant accumulation at these elevated price levels to sustain this rally.

    Below are some charts of some symbols that the Arps Scan Sentry Toolkit has helped me identify for my weekly trading watchlist. Each contains a little explanation of the analysis visible on the chart. If you have any questions about the indicators on these charts please follow this link to a legend describing these tools.

    _____Longs_____

    BAC

    (This Bull Flag breakout coincides with a resistance trendline breakout and a recent bullish Pullback 23.)

    VMED

    (A breakout of the down trendline which coincides with a Bull Flag breakout. )

    _____Shorts_____

    PSA

    (A bearish Trender Pullback at the Long term Trender. This coincides with a bearish 'Pullback Divergence' with Radar2 Price Leader and Radar1 Fear/Greed )

    KR

    (Here we see a Trend Exhaustion 1 Overbought signal at resistance. Note that Radar2 Price Leader is pointing down and it is weaker this time than it was the last time price tested the $23.25 level. This is what we call a Deep Dip Triple divergence. )

    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.

3 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.

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