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Monthly Archives: December 2012

  • Seasonal Greetings

    From all of us at Jan Arps' Traders' Toolbox to YOU, "May your days be merry and bright; and the may the new year bring you prosperity and keep you in good health."

    Thank you for being an important part of our twenty years of service.

    May the trend be with you,

    Hawk

  • Thank You

    Hawk’s Scan Sentry Report December 17

    This week in the S&P index we see that the Radar3 Trend Strength Indicator just crossed above the zero line which confirms the Triple Trender bullish indication. We also see strong buying indicated by the Radar1 Fear/Greed indicator. However, in the NASDAQ index this is not the case. The composite NASDAQ still shows a weak bearish trend in the Radar3 Trend Strength indicator as well as a recent bearish divergence in the Radar1 Fear/Greed indicator. Both of these markets show deceleration in the Radar2 Price Leader. In as much as these two markets are relatively correlated, and since the NASDAQ index seems to have been leading the S&P index for the last six months (see previous post “Follow the Leader" 11/18/2012) I consequently have a short-term bearish bias in both of these markets. Eventually, some time in 2013, I expect to see the S&P making new highs, but until the United States federal budget gets worked out I have little hope of seeing that rally manifest.

    S&P Index

    NASDAQ Index

    I want to take this opportunity here at the end of this season to say ‘Thank You” to you. I hope that you have found some value in the efforts that we have been putting out to help with the technical analysis of these markets this year. I truly appreciate the feedback and comments that many of you have offered regarding this blog. It has been about a month since we changed the format of these postings, and the response we’ve gotten has been overwhelmingly positive. However, we are always looking for ways to be more helpful. If your voice has not yet been heard, please feel free to drop us a line in the “Comment” section at the end of the post, or email us at info@janarps.com.  In the mean time we’ll keep following these markets and telling you what we are seeing in the technical analysis.

    As we draw near the close of this year, I want to continue to show you how I am looking at a few of my favorite charts. On the examples below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (Here we see a bearish Pullback 23 coinciding with a bearish trendline breakout signal. At the same time we see a bearish Pivot Divergence in Radar1 Fear/Greed. I’m looking for a downward move in this contract this week.)

    Equities Setups:

    (Sell Short) CVX- Chevron Corp.

    (A bearish Trend Exhaustion 1 and Pullback 23 create a Pullback Divergence. This Trend Exhaustion-123 signal is occurring at the end of the up-wave count cycle which is currently identified as reversal ‘Wave-B’. )

    Commodities:

    GOLD

    (This market currently favors the bears; but since the price is sitting at support at the up trendline it would be prudent to wait to enter a short-term short position until the price moves back up to resistance around the down trendline.)

    CRUDE OIL

    (This is still a range bound market, and the bears still have a slight advantage. The Triple Trender is bearish as well as the Radar3 Trend Strength Index and the Radar1 Fear/Greed indicators. If this market grinds close to $90 it may be worth establishing a short-term short position again. )

    Forex:

    USDCAD

    (We see a nice bullish Pullback Divergence accompanied by a Pullback 23. Note how the Bear Flag Target was just achieved.)

    May the trend be with you,

    Hawk

    www.janarps.com

    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.
  • Watching and Waiting

    Watching and Waiting

    Last week’s analysis turned out pretty well.  The NASDAQ  index dropped as the bearish Pullback 23 which we pointed out last week indicated it probably would. Gold had a nice downward move as was predicted in last weeks analysis, and the Crude Oil chart provided a nice short fade-trade from the range high. We also saw the EURUSD test the down trendline, which we publicly anticipated here last week, and this enabled us to fulfill our target on that long position.

    This week there are fewer clear trading signals than last. As the ‘Fiscal Cliff” looms closer, most of the markets I am watching appear to be moving sideways in a relatively low volume holding pattern. They appear to be waiting for the American politicians to find a compromise which will address a way to pay off the federal debt which has been accumulating since President Clinton left office with a balanced budget at the turn of the Millennium. It’s interesting to note that the tax policies of the United States have not been able to generate enough revenue to balance the budget since tax cuts were passed in 2001. And then the economic crash of 2008 obviously exacerbated the problem. Consequently, the United States Treasury has had to sell even more promissory notes recently, mostly to Chinese buyers,  and thereby our national debt and the threat of inflation have been accumulating even more rapidly. Now the markets are waiting to see if a few well funded legislators are willing to send the world over the cliff rather than solve the problem.  I doubt the answer will come this week.

    As the markets are waiting, I want to show you how I am looking at a few of my favorite charts. On the examples below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (The trend orientation signals on this market are conflicting. While Radar3 Trend Strength still indicates that this market is in a bearish trend, we also see a nice pullback into the short-term Trender of a bullishly synchronized Triple Trender.  As long as the Radar 2 Price Leader is still moving downward and Radar 3 Trend Strength is still bearish I will maintain my bearish bias. However, if the Radar3 Trend Strength indicator crosses above the zero line I will reassess my analysis.)

    Equities Setups:

    (Buy) HCP- HCP Inc.

    (Notice how at the beginning of December the Radar3 Trend Strength indication crossed  below zero while remaining blue. Now those blue Radar 3 histogram bars are shrinking back up toward zero again and the Radar 1 Fear/Greed and Radar 2 Price Leader indicators are bullish… This is a bullish setup.  Also note that the Triple Trender has recently identified a pullback into the short-term Trender after all three Trenders turned bullish.)

    Commodities:

    GOLD

    (No clear trading signals here, but the bears still have control as indicated by the Triple Trender, the Radar3 Trend Strength, and Radar1 Fear/Greed. Don’t sell short until the Radar2 fast line crosses back under the Radar2 slow line.)

    CRUDE OIL

    (This is still a range bound market, but the bears have a slight advantage. Triple Trender is bearish as well as the Radar3 Trend Strength Index. I have set the Radar1 Fear/Greed alert line at the bearish equivilant of the most recent bullish peak (-9.5). If Radar1 Fear/Greed closes significantly below that level then I will no longer consider buying the low end of this range.)

    Forex:

    EURUSD

    (As predicted last week this market went up to test the down trendline and was rejected. Now we look for a test of the up trendline which may create a bullish pullback opportunity… we’ll see when we get there. Radar 3 Trend Strength looks more bearish than bullish.)

    May the trend be with you,

    Hawk

    www.janarps.com

    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 Secret is Out

    Hawk’s Scan Sentry Report December 3

    This week I want to share a secret with you, but you have to promise not to tell anyone else. I’m sharing this with you because you are one of our valued readers of this blog, and as such we are like family. So let’s keep this in the family. For your eyes only I will describe precisely how one of our best proprietary signals is generated.

    You might have noticed on the charts I present each week a signal dot with “PB23” text above or below the dot. This is what we call a Pullback 23 and it identifies a pullback in a trend. It is generated by a confluence of conditions from two of our best proprietary indicators … the Radar2 Price Leader and the Radar3 Trend Strength Index. Combining the names of Radar2 and Radar3 we get 23, and the fact that it identifies a pullback in a trend gives it its name ‘Pullback 23’.  Here’s how it works. Shhhh…….

    First we want to identify the orientation and strength of the trend. For this we use the Radar3 Trend Strength indicator which plots a histogram up or down identifying the strength and direction of the trend. The histogram is colored blue and pointing up when the market is trending upward, and it is pink and pointing down when the market is trending downward. However, if the color of the Radar3 indicator does not match the up/down orientation of the histogram this identifies trend weakness which could be a pullback in the trend. For example if the histogram is pointing down but the bars are blue, or the histogram is pointing up and the bars are pink this signals weakness in the trend which could identify a pullback opportunity.  Once the Radar 3 Trend Strength indicator has identified a pullback possibility, we look for price acceleration back in the direction of the predominant trend. For this we turn to the Radar2 Price Leader Acceleration Oscillator. This two line oscillator monitors the acceleration and deceleration of the price movement and thereby provides the quickest possible indication of impending changes in price direction. For a bullish pullback we are looking for an acceleration signal which is generated when the fast line crosses over the slow line. A bearish or decelerating signal is generated when the fast line crosses under the slow line. Once Radar3 identifies weakness in the trend and Radar2 identifies acceleration or deceleration back in the direction of the trend, that is when the Pullback 23 signal dot is generated. The chart below shows you how this works….

    I want to show you how I am looking at a few of my favorite markets this week. On the charts below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (I am seeing a bearish Trend Exhaustion 1 and Pullback 23. Although the Triple Trender has just turned bullish, Radar3 Trend Strength does not yet confirm this shift in trend orientation. If Radar3 Trend Strength crosses above the zero centerline then exit this trade.)

    Equities Setups:

    (Sell Short!) MRK- Merck & Co.

    (A bearish pullback 23, Radar2 Price Leader also forms a bearish Pullback Divergence. Stop-loss is a close across the long-term Trender @$45.46)

    Commodities:

    GOLD

    (The technical indications of this market show that, for the next week, the downside is still stronger than the upside. Note the Triple Trender is more bearish than bullish, as is the Radar3 Trend Strength Index. The Radar2 Price Leader also shows price still decelerating. Note the recent bearish Trender Pullback signal.)

    CRUDE OIL

    (This is still a range bound market in an overall downtrend.  Until we break out of this range, the only trade opportunities I see are short term trades which fade the extremes of this range).

    Forex:

    EURUSD

    (As noted last week this market is more bullish than bearish. I still expect to see this one grind upwards at least until it meets resistance at 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.

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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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