President’s Day

//President’s Day

Hawk’s Scan Sentry Report Feb 18th 2013

This is a blog about the technical analysis of financial markets, but on Monday our financial markets are closed to celebrate Presidents Day, originally meant to commemorate the birthdays of Abraham Lincoln and George Washington. Closing the stock exchanges is a big deal, so let us look at why we do that.

Lincoln was one of the most violently disliked presidents up to that time in our nation’s history. As we know, his presidency came before the industrial revolution, when much of our nation’s economy was based on our vast expanses of farmland and the agrarian products and lifestyle that land produced. In economic terms the plantation owners were the CEO’s of that period, and the economic status quo throughout the southern states depended on slaves as labor. Making slavery illegal and freeing the slaves was an important step in our nation’s moral coming of age. It acknowledged that our founding principles were based more on the fundamental rights of people (although the slaves were not legally considered citizens) than on the ‘freedom’ of the aristocracy to make exorbitant sums without regulation. (After all, freeing the slaves was regarded as a regulatory action on business at the time).  Although the emancipation proclamation was an attempt to entitle all men to the fundamental rights of life, liberty, and the pursuit of happiness it did so at the expense of the economic structure of the rebel states. And for his courageous and just position on the abrogation of slavery, Abe Lincoln was one of the most reviled presidents in our history. In fact he was assassinated for those principles.

George Washington rose to power via his role in the war we fought for independence, inspired by issues like taxation without representation. The Boston Tea Party was a rebellion against the fact that British corporations like the East India Company had political clout over our lives in the new world while the citizens of the colonies had none. These days, post Citizens United, when money represents speech in the political world it seems that, once again, the powerful corporations are represented in the halls of power at the expense of the citizenry.

Monday Feb 18,2013 the American markets are closed in these men’s honor. On this President’s Day perhaps we should remember the battles these two presidents fought on behalf of a government representing the rights and well being of persons instead of those of the financial powerhouses.

And now for some technical analysis….

Here’s an update from our analysis of last week. As predicted, the indexes continued their tentative climb. Our published stock pick (MCK) briefly went in the right direction but we got stopped out at break-even on Friday. Gold finally confirmed our bearish inclination by closing well below support on Friday.  In fact we are looking for opportunities to add to our short position this week if we see a pullback to the breakdown level. Unfortunately we exited our short GBPUSD too early as it clearly continued to head south last week, but we did make a little on our short EURAUD trade.

Watching the American stock indexes this week, it seems that the movement in the S&P and Dow futures contracts are caught between the rapidly rising Russell and the simultaneous ballast of the stubbornly unmoving NASDAQ.  If the NQ starts to rise, or the TF begins to stumble I will expect to see the S&P follow suit.  I will be watching these markets in concert as a part of my day trading strategy this week.   For a mini-swing trade I will be focusing on our short gold trade, looking for another entry opportunity to add to my position to the down side. You will find details on the charts below.

For those of you not familiar with “Hawk’s Scan Sentry Report”, on the examples below I explain my analysis for some of the most commonly traded symbols using some of the most highly regarded technical indicators available. These tools 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  Futures

(This is still very bullish in the Triple Trender and Radar3 Trend Strength. However we have a Trend Exhaustion 3 signal and even though Radar1 Fear/Greed is very strongly bullish, we do see a bearish divergence forming.  That divergence is mirrored in a decelerating Radar2 Price Leader. I am anticipating a pullback sometime soon and I will be watching the other indexes for confirmation.  ) 

Russell  Futures

(This market  appears to be a driving force to the upside. When this rally loses steam I would expect to see the S&P start to drop as well. ) 

NASDAQ  Futures

(This market often leads the S&P but seems to have ceded that role to the Russel for the time being.  If the NASDAQ starts to rally strongly, I would expect the S&P to follow suit.) 

Equities Setups:

(Buy) FMC– FMC Corp.

(A “Pullback” or “Trend”  Divergence identified by the Arps Auto-Divergence tool. A Trend Exhaustion1 OS signal and a Pullback 23 signal combining to create a “Pullback-123” trade. Although Triple Trender has turned bearish, note that the Radar3 Trend Strength is still bullish. )

Commodities:

GOLD

(Since Friday’s breakdown we see that the Radar1 Fear/Greed is confirming the bearish strength by making new lows below the alert line set at the Radar1 valley two valleys back. I’m looking for pullback opportunities to add to my short position.  Our downside target is the support line around $1560.)

CRUDE OIL

(This market is becoming more ‘two-faced’ this week. Although we are still in a Bull flag pattern, the asynchronous Triple Trender and weakening Radar3 are haunted by  stronger selling pressure seen in the Radar1 Fear/Greed indicator. This is a “wait and see” market for me. )

Forex:

(Sell Short)-NZDCHF

( An oscillating market like one this can offer low risk ‘fading’ opportunities. Note the bearish Trend Exhaustion 1 signal and “Trend” divergence signal. I usually wait for Radar2 Price Leader to cross under the green slow line to confirm entry. )

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 .

2018-01-08T07:03:41+00:00 February 17th, 2013|Hawk's Picks|