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Hawk’s Scan Sentry Report

  • Turn up the Volume!

    Hawk’s Scan Sentry Report November 26

    Today I want to talk about trading and holidays. This past week we celebrated Thanksgiving in the US. Even though many of the markets were open most of the week, for many American traders this was a week to focus on gratitude for the other parts of our lives. One would expect to see very light volume on a week like this and we did. For example, in the S&P futures contract the average weekly volume is 8.6 million contracts/week, but last week it was only 5.25 million contracts. Although some traders prefer to trade the index contracts on lighter volume because the price moves are generally less volatile, I did not participate last week. Like many, I was with family enjoying other aspects of life while I can. For me, trading is a means to an end, not an end in and of itself. I trade to manifest riches, but my life is enriched by my relationships with family and friends.  For those relationships I am grateful.

    But now we are in the final month of the year and I expect to see the markets turn up the volume for the next couple of weeks; and I plan to be participating through the last waves of 2012. I want to show you how I am looking at a few of my favorite markets this week. As predicted in last week’s blog, the US indexes rose through the holidays on light volume, and most are currently pressing against resistance levels. They have moved pretty far pretty fast so I expect to see stronger sellers than buyers to start off 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

    ( This leading index has moved up from last Friday’s lows to the next significant resistance level at 2636 and trendline resistance as well. The  Radar 2 Price Leader is overbought, the Radar3 Trend Strength Index is still bearish, and Radar1 Fear/Greed has formed a bearish pullback divergence so I would expect to see this  up-move slow down or reverse early this week.)

    Equities Setups:

    WYNN- Wynn Resorts

    (A bullish pullback from the up trendline preceded by a bullish Trend Exhaustion 1 and Pullback 23. Next target $115.00 )

    Commodities:

    GOLD

    (Since the price has broken above the high of the Bear Flag consolidation, the Bear Flag breakdown of November 2nd has been negated .We have since closed above the down trendline and are one Trender away from a synchronized bullish Triple Trender. Radar1 Fear/Greed is beginning to indicate that the buyers are regaining the upper hand. I am looking for bullish confirmation in the Radar3 Trend Strength indicator.)

    CRUDE OIL

    (This is still a sideways market , dangerous to trade without a clear trading signal. Radar1 indicates that buyers are beginning to step up.  The current range is $89.50 and $84.70).

    Forex:

    EURUSD

    (We got our bullish confirmation early last week when the Radar2 Price Leader crossed the zero line. Now all three of the Triple Trenders are bullish along with the Radar 3 Trend Strength and Radar1 Fear/Greed. I expect this upward move to continue at least until we see a test of  the down trendline around $1.3100 .)

    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 advisor and their tax advisor to determine the suitability of any investment.
  • Follow the Leader

    Hawk’s Scan Sentry Report November 19

    Last week I introduced the new format to "Hawk's Scan Sentry Report" and have already gotten several positive responses from regular readers. Thanks for the feedback.

    As many of you know, I like to compare indexes and their derivatives to see if one is leading the other and thereby observe which has a better chance of moving in which direction. We all know that all of the American equities markets have been dropping since mid October.  The next significant support level for all of the major American indexes is the lows established and tested last May and early June. This week I note an interesting phenomena… the NASDAQ and Dow are already very close to that level of support whereas the S&P still needs to drop 3-4% to reach that mark. It is likely that the NASDAQ futures contract will test those early summer lows and run through whatever stop-loss orders may be resting there. If the NQ tests those lows in the next few days and then we see a rally, I would expect the ES to follow the rally without testing that support level .  One likely scenario is that that some of the indexes will test those early summer lows, then bounce (perhaps toward the end of the year for a nominal ‘Santa Clause Rally’). Normally I would look for a subsequent retest of those lows to follow, but a lot is riding on the markets perception of the American legislators' ability to avoid the ‘Fiscal Cliff’.   If they succeed then it’s likely that the buyers will once again become more numerous than the sellers and prices will rise without retesting that support level. If a compromise is not reached and austerity measures are enacted, then we can expect to see the markets continue drop due to low demand from American consumers.

    On the charts below I explain my analysis 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:

    S & P

    ( All of our indicators are currently quite bearish for the S&P. Historical  indications show the NQ contract leading the ES contract on this move down so I will watch how the NQ contract responds to its early summer lows. Next support levels for the ES contract are 1315 and 1285, resistance around 1390. )

    NASDAQ

    (We are close to the early June lows which coincide with a Bear Flag target at $2426.75. We also see a bullish  oversold Trend Exhaustion1 and a bullish Trend Exhaustion 3 signal. I expect a test of support at 2444 and if Radar1 Fear/Greed does not cross below its previous threshold  of -172 that will create a bullish pivot divergence and good upside potential. )

    Equities Setups:

    C- Citigroup Inc.

    (A bullish Pullback 23 ,and Trend Exhaustion 1, and Trender Pullback at support created by a previous high. A stop-loss should be placed relatively close to this bullish signal. )

    Commodities:

    GOLD

    (Last week I suggested we look for a bearish Pullback 23 which we got.  Now I see that that created  a  bearish ‘Pullback Divergence’ in Radar 2 . I would expect to see gold continue to the downside at least as far as the up-trendline. )

    CRUDE OIL

    (Little has changed in this market over the past week. We are still in a downtrend, resting at a trendline support level looking to achieve a Bear Flag target. Since  Radar1 Fear/Greed is not yet showing us signs that the buyers are stepping up, the path of least resistance is still down).

    Forex:

    EURUSD

    (A bullish Pullback 123 creating a Pullback or “Trend” divergence at support which is going against a bearish Triple Trender. Since this is a bullish setup in a bearish trend  I would like to see the Radar2 Price Leader move above the zero line into acceleration for bullish confirmation. )

    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.
  • A New Approach

    Hawk’s Scan Sentry Report November 12

    This week I would like to introduce a little different approach to “Hawk’s Scan Sentry Report”. Instead of scanning a universe of equities for trade setup opportunities, as this report has been doing for the past several years, I would like to follow a few specific markets every week to note how the technical analysis of those markets develop. In that way we familiarize ourselves intimately with just a few symbols rather than looking at something new every week.  Don't worry, some things will not change. Many of you faithful readers know that I follow the S&P emini futures contract regularly in this blog, and I will continue to do so. I may also occasionally refer to some of the other stock indexes when looking at more than one index seems particularly relevant. In this new format I will still try and note one or two particular equities each week and explicate the technical analysis of those as I see fit.

    However, in addition to the S&P futures contract and a well known stock or two I will also follow the Crude Oil and Gold contracts (CL and GC) and provide my analysis of those. There are a lot of traders (including myself) who like to trade these contracts.    I also plan to include some forex analysis each week.  Although I ‘day-trade’ most of these instruments, the emphasis in these weekly postings will be on the general trend orientation and trade setups as they show themselves early in the week.  Since these seem to be the most popular markets that people like to trade, I hope that with these changes this blog becomes more relevant to more readers . Please let me know your thoughts and feedback on this new format as I endeavor to make these postings more useful to you.

    On the charts below I will explicate the technical analysis using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and they 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. And now I present……

    The Charts and Analysis

    S&P

    (The Triple Trender, Radar3 Trend Strength , and Radar1 Fear/Greed are all bearish. As noted last week, I expect 1360-1365  to serve as a support level. Since Radar2 Price Leader is oversold I wouldn’t be surprised to see a pullback into the Triple Trender early this week. )

    PGR

    (A bullish  Pullback 23 at support after a pullback into the Triple Trender. Radar1 Fear/Greed and Radar2 Price Leader have both formed a bullish ‘Pullback Divergence’.)

    GOLD

    (The Triple Trender has synchronized bearishly and made its first pullback into the short and medium term Trenders. The Radar3 Trend Strength index indicates a pullback in the down trend as well. We could potentially be setting up for a bearish Pullback23 in the next few days.  Although Radar1 Fear/Greed indicates we are seeing more selling than buying it has recently created a bullish ‘Pullback Divergence’. Radar2 Price Leader recently showed a short term bullish ‘Pivot Divergence’ as well. )

    CRUDE OIL

    (The bears have control of this market as indicated by the Triple Trender, the Radar3 Trend Strength Index, and the Radar1 Fear/Greed indicator. We are currently resting at a long term support level which could hold, but we have a BearFlag target at $81.04. The next support level is $79.22 )

    EURUSD

    ( After weak buying pressure near the October highs indicated by Radar1 Fear/Greed, we see the price at resistance and the Triple Trender bearish, and Radar2 Price Leader oversold. I am looking for a buy this week for a pullback into the Triple Trender. I’ll be watching the Radar3 Trend Strength indicator for insights into which direction the longer term trend will develop.  )

    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.
  • Bulls, Bears, Donkeys, and Elephants

    Hawk’s Scan Sentry Report November 5

    Many traders expect the American stock market to drift without commitment one way or the other until after the US elections and then respond to the outcome of the election by charging up or down.  Some bloggers are even trying to predict how the market will react if one or the other candidate wins. Personally, I do not see it as my job to predict the markets…. It is my job to be ready to meet the markets.

    I don’t know how the market will react to the election results. I do know, however, that since our current president took office in 2009 the stock market has doubled in value. This is due in large part to the accommodative financial policies (free money to the bankers) of men like Bernanke and Geitner, who also worked with previous Republican administrations and, like so many of our treasury officials over the last several decades, came up through the ranks of Goldman Sachs and other large banks.  The point is that Wall Street is heavily invested in both political parties, and the power brokers in the markets that we trade will likely have their way regardless of who lives in the White House.

    The truth is that the wealthiest financial and corporate institutions have always looked for ways to buy influence in governance. It is just easier now.  In the old days buying influence was called bribery and was patently illegal. Now it’s called ‘investing in politicians’ and ‘lobbying’ by Super PACs.  Since the 2010 decree of five partisan Supreme Court justices that ‘corporations have the same constitutional rights as persons’ and as such ‘money represents speech in the political sphere’ (two notions that I believe our revolutionary founding fathers would wretch at) money has become a far more powerful influence on our electoral process. Have you noticed exponentially more political ads this year? I have. And the dangerous thing is, there is no transparency as to the source of that money. Some of our candidates were even hosting political fundraisers in foreign countries this election season!

    Please excuse my digression... the point is that I don't use politics to analyze the markets; I much prefer technical analysis. So how am I preparing to meet the coming markets? Well, my bearish orientation on the markets is unchanged from last week.  Once again looking at the S&P eMini contract, we got a pullback into the Triple Trender as expected. The Radar 3 Trend Strength Index is still strongly bearish, and the Radar1 Fear/Greed indicator is  indicating that there is quite a lot of selling compared to buying going on in this market at this time. As noted last week we are still looking for support at 1400, 1385 and 1365 and resistance around 1420 and 1460.

    Although I am currently generally bearish (at least until we see signs of a  “Santa Claus Rally”) I always look for opportunities in both directions. Below you will find daily charts from selections on my weekly watchlist  with possibilities in both directions. As always, I do my best to explain the setups on these charts; but if you  have any questions about any of the indicators on these charts please follow this link to a legend describing these tools.

    _____Longs_____

    AIZ

    ( A bullish Pullback 23 and Trend Exhaustion 1 signal at the up trendline. Note how this forms a bullish Pullback divergence in the Radar2 Price Leader.)

    DWA

    (This Pullback 23 signal coincides with a nice breakout of the resistance trendline. Note the recent pullback into the Triple Trender.)

    FBC

    (This Trend Exhaustion 123 is setting up to catch a breakout of the trendline at the recent highs .)

    _____Shorts_____

    PAG

    (A breakdown from the up trendline following a bearish pivot divergence in Radar1 Fear/Greed. Beware, Radar3 Trend Strength is still bullish. )

    GXP

    (Radar 3 Trend Strength recently went bearish as the price breaks below the up trendline and all three Triple Trenders are now bearish. )

    MDF

    (Another Trend Exhaustion 3 signal accompanying a bearish pivot divergence with Radar1 Fear/Greed. Again, be careful, Radar 3 Trend Strength still shows strong bullishness.)

    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.
  • Scanning for Profits

    Hawk’s Scan Sentry Report October 29

    Looking at the S&P emini futures contract, all of our primary indicators have now turned bearish. The Triple Trender is synchronized bearishly. The Radar1 Fear/Greed indicator is making lower lows after posting a bearish Pivot Divergence. Even the Radar 3 Trend Strength Indicator is giving a bearish reading for the first time since the middle of June. The Radar2 Price Leader is extremely oversold right now so I would expect to see a pullback up into the Triple Trender followed by further selling pressure to the downside. We are currently resting right around 1400 which is where last week's posting identified support. 1385 and 1365 will be the next lower support levels on this contract.

    I was recently asked how I scan for the stocks that end up on my weekly watchlist published here. The answer is simple. I use a set of tools called the ‘Arps Scan Sentry Toolkit’ (from whence this blog gets its title). This is a set of spreadsheet indicators that are programmed to identify some of my favorite technical setups and to plot the pertinent information on a spreadsheet application like the Trade Station Radar Screen or the eSignal Watchlist. Some of the pertinent information that these tools plot includes how many bars ago the setup fired and how much the price has changed since the setup fired.  Some of them even give me warning signals when the setup conditions are starting to come together or a profit target if the signal is a measured move indication.

    After using the Trade Station Scanner to create symbol lists of some of my favorite setups, I then combine the lists on a Radar Screen so that I can sort the data however I want and compare the status of different signals. Finally, I link the Radar Screen to a chart with the significant charting indicators applied and then I can click on any symbol in the RadarScreen and immediately see what the chart looks like.

    Some of those charts are published below. There are setup examples both long and short. 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_____

    TDG

    (A combined assortment of bullish signals including a Trender Pullback, a Pullback 23, a Trend Exhaustion 1 oversold signal and an AutoDivergence ‘Trend Divergence’  signal .)

    PKI

    (This combines a trendline breakout signal, with a Pullback 23, Trend Exhaustion 1 and ‘Trend Divergence’ signal.)

    _____Shorts_____

    OC

    (A series of bearish divergences followed by a bearish Trend Strength reading .)

    FR

    (All three Triple Trenders turned bearish after a bearish pivot divergence and a weak Radar3 Trend Strength indication.  )

    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.
  • Identifying a Leader

    Hawk’s Scan Sentry Report October 22

    When you want to know what is causing global events, the common wisdom is ‘follow the money’. But when it comes to the financial markets which we like to trade it is all money. So, in order to get some clues to potential market movements we have to find out which markets are leading and which are following. There is an entire field of technical analysis called 'Intermarket Analysis’ dedicated to this topic and TraderPlanet.com does an excellent job of offering several blogs on the subject.  In this case I will keep it simple and just look at two American market index futures contracts to make my point.

    I postulate that the NASDAQ has led the S&P in this four year rally we have been experiencing.  Why do I say that?  Well, if we look at some of the recent key points of the rally, particularly when price breaks through resistance levels and how far back it retraces, we see some tell–tale signs. Let’s compare weekly charts of the futures contracts for each index.  Note how on October 15th of 2010 the NQ was already breaking through resistance to new highs. The S&P didn’t accomplish that for another three weeks. Next, note the panicked pullback after the dollar downgrade in August/September of 2011. The NQ simply tested the previous support/resistance level and consolidated above that level whereas the S&P spent most of that consolidation below that level. The NASDAQ contract finally broke to new highs in late January of 2012; the S&P didn’t accomplish that until February 10th.  Later, when we experienced the sell off in May of this year, the NQ contract  never broke below the previous breakout price support level, whereas the S&P e-mini once again spent several weeks below that support/resistance level.

    I mention this in order to draw you attention to where we are now. Note how the NQ contract has already broken below our previous highs from April 6; the S&P has not breeched those levels yet. If the NQ contract led the ES contract up it does not necessarily mean that it will lead the way down. However, in so much as the NQ appears to be the leader, I would expect to see the S&P follow the NASDAQ down at this point.  As noted in last week’s blog, fear is more likely to inspire this hyper-extended kind of market than greed… at least until after the American elections.

    As usual, below are the charts of some of the symbols that I am looking at this week for my trading watch list. There are examples both long and short. 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________

    NYB

    (A Pullback-123 which combines a Trend Exhaustion 1 signal with a Pullback 23 signal to identify a Pullback Divergence. We also see a Trender Pullback here. This is occurring at the up trendline support level.)

    TIP

    (This is a similar scenario as above. Simultaneous bullish TE-1, Pullback 23, and Trender Pullback signals)

    ________Shorts________

    PL

    (A bearish Pullback Divergence identified by the Pullback-123 combination described above, this one at the down trendline resistance level.)

    WM

    (Same setup as the previous chart with an additional Trender Pullback signal. )

    MCRS

    (Another Pullback-123 Pullback Divergence in a downtrend. )

    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.
  • What My Job Is and Isn't

    Hawk’s Scan Sentry Report October 15

    Some think that as a technical analyst it is my job to try and predict the future of the markets I am studying. Not so!  I would rephrase my job description like this… it is my job to come up with  analysis that  provides a  short term bias that is constantly being updated, a medium term biases that takes longer to change, and a  long term bias that informs my investments more than my trading.  However, these are not predictions, they are biases.  This may sound like an apology, but it is not. Over the past year the market has moved pretty much in the directions I have expected (and published).  The way I see it, my job is not to predict the markets I trade; it is merely to design good trades for whichever direction the market might go. I cannot force my will on the group mentality which is the market.  At best, all I can do is be properly prepared to meet the market and her participants in the process buying and selling. That means having good entry and exit strategies in either direction. It also means having a perspective that is as accurate as possible. This is where experience and sophisticated technical analysis helps.  However, both of those come at a price.

    So, what do we see for the coming week? In the S&P emini we currently rest around 1420. As noted last week we could easily see the current slide in the American equities market take us back to support levels established in March and reinforced last August around 1400.  1465 will act as resistance if we make it back there this week. As you are trading remember, this is earnings season and election season… anything could happen to spook or inspire a security or even the market as a whole. Economic and political surprises should not be unexpected at this time in the cycle; and fear has a better chance of inspiring a major move in the market than greed.

    Below are the charts of some of the symbols that I am looking at this week for my trading watch list. There are examples both long and short. 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_____

    HCA

    (A TE-123, pullback divergence setup... Trend  Exhaustion 1 with a simultaneous  Pullback 23. Wave counter shows that this may be the end of Wave 4.  This is occurring at a logical support level and above the long-term Triple Trender)

    NPSP

    (A breakout of a Bull Flag and the resistance trendline accompanied by a Pullback 23. This one may backtrack to breakout level @ $10.07... target is $12.05)

    WDR

    (A pullback divergence with a Pullback 23 signal.  This one is also at a support level above the  long-term Triple Trender)

    _____Shorts_____

    EXC

    (A bearish pullback divergence below the long-term Triple Trender, accompanied by a Pullback 23 signal. This is occurring at a logical resistance level of previous lows.)

    PSA

    (A Bear Flag breakdown accompanied by an up trendline breakdown. All three ‘Radars’ are bearish too.)

    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.
  • Looking Ahead

    Hawk’s Scan Sentry Report October 8

    Few would argue that we are currently in the upper reaches of a mature bull market.  This Fed fueled market has been making higher lows and higher highs since Obama took office in 2009 and is now approaching the historical peaks of rallies which ended in February 2000 and October 2007. It’s amazing what practically free money will do for a stock market. At this point we would only need a 7%  rise in the S&P to meet those historical highs which create our next significant resistance level at around 1560.  As I have noted several times this year in this blog, I expect to see this market test those levels before the end of this year.  If we do reach the 1560 level I will then expect to see a lot of profit taking.  I don’t know how much ground we will cover toward that upside target this week since we are currently testing the most recent interim highs attained several weeks ago.   This, of course,  creates a bit of resistance. If we fail in this attempt to break through our current resistance level of 1468 we are likely to see another pullback into the 1420’s or perhaps back to around 1400 before the bulls make another charge toward new highs.  In my short term trading endeavors I hope to be ready for either scenario this week.

    It is vitally important to be prepared to ride this thing up down and/or sideways because, like a rodeo bull, this market will do its best to buck and kick in every direction in order to throw you off. Ask any rodeo cowboy, the trick is to endeavor to become one with the raging animal you are riding.  That’s why it is especially important to look at both long and short trading possibilities in order to be ready for the unforeseeable gyrations of this bull market. Below are some charts of some of the symbols that I have identified this week for my weekly trading watch list both long and short. 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_____

    BLK

    (A nice breakout above the down trendline accompanied by a bullish Pullback 23. All three Trenders of the Triple Trender are now bullish.  Note that Radar1 Fear/Greed is starting to make higher highs as well. )


    ARCC

    (A Pullback 23 and Trend Exhaustion 1 oversold signal occurring at the up trendline.  If this trades below the recent lows then get out.  )

    PIR

    (A nice Pullback 23 after a pullback into the Triple Trender)

    _____Shorts_____

    FTK

    (Rejection at the down trendline. Downside target is $10.65 )

    ACTG

    (Here we see a bearish Pullback 23 and a breakdown below the up trendline. Target is $23.24)

    SHFL

    (This one  is all about the pivot divergence with Radar1 Fear/Greed ).

    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.
  • Would You Care to Dance?

    Hawk’s Scan Sentry Report October 1

    Trading the markets is like dancing with a fickle partner. It’s very important, however, that you let the market lead. If you do not then you will pay… much worse than just getting your toes stepped on.  If you do let the market lead and you pay attention to the subtle clues she gives you as to which direction she is tending, then you can find yourself  the envy of all of the others at the ball, gracefully moving back and forth with the most powerful being there. But remember, YOU MUST LET HER LEAD. If you try to lead she will humiliate you with her wily ways. So how do you read her subtle clues? Well, you need good sensors that telegraph her intentions to you as she herself is deciding to make her move. This is precisely what the study of technical analysis is designed to provide. However,  there is no substitute for an experiential education that enables you to perceive the nuances that separate the actionable signals from the others. When you make mistakes the market mistress will berate you (and your trading account) until you learn to humble yourself enough to perceive her will, not your own hopes and expectations. That is why I often encourage new traders to reassess their analysis frequently, as the markets morph from day to day. There is no way around it, this type of experiential education can be expensive; however, sophisticated technical analysis can help curb the costs significantly.

    Right now when I look at the American equities market as portrayed by the Emini-S&P futures contract, I see a pullback in an uptrend. Note how we retraced to the support/resistance level in the mid 1420’s , and how we see a bullish Pullback 23 setting up right at the up trendline. We’ve even got a bullish “Pullback Divergence” developing in the Radar2 Price Leader which also happens to be oversold right now.  We still have a Bull Flag target to achieve as well.  Radar1 Fear/Greed is not as strong as I like it; however I am fine with my bullish outlook until the Radar1 Fear/Greed indicator drops below the previous lows of -25.76 on August 30 one month ago.

    Although I am bullish on the market in general, I will let the market mistress lead me where she will. That is why I like to look at both long and short trading possibilities in order to be ready to dance whichever direction she decides to step.  Below are some charts of some of the symbols that I have identified this week for my weekly trading watch list. 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_____

    CDNS

    (This is a Pullback 123 trade combining a Trend Exhaustion1 signal and a Pullback 23. This is occurring right at support and creating a bullish Pullback Divergence. )

    AM

    ( Another Pullback 123 pattern, this time as a breakout to new highs above the down trendline. )

    MDR

    (This is a bullish Pullback Divergence with Radar2 Price Leader identified by a combination of signals from Trend Exhaustion 1 and Pullback 23)

    _____Shorts_____

    MO

    (A bearish Pullback 23 into the Triple Trender creating a pullback divergence in the down trend.)

    CHD

    (Here we see a Pullback 23 signal at the short-term bearish Triple Trender).

    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.
  • 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.

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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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