Raptors and Prices Floating on a Lot of Hot Air

//Raptors and Prices Floating on a Lot of Hot Air

Hawk’s Scan Sentry Report August 13

There’s no denying that we’re in a Summer uptrend.  As I wrote several weeks ago, once the S&P index found support around 1320 we could see tests of 1400 and higher. Well, we’ve been making higher highs and higher lows ever since then and the next resistance level is now the post meltdown high around 1413. I would not be surprised to see the market test that mark  this week and we may even witness a little ‘stop-running’ beyond that price level. However, this market reminds me of the hot air columns that raptors float upon to carry them higher with seemingly little effort. This bullish grind to test our 4 year high is being accomplished on the back of very little volume and even less buying pressure. The bulls are not putting much effort into this rally, but instead floating upward on the invisible hope of further accommodation by the central bankers of Europe and the USA. Look at this 180 minute chart of the S&P futures contract. Each successive higher high is coming about with consecutively lesser readings in the Radar1 Fear/Greed indicator. We do have a bullish Pullback 23 signal which may give us enough push upward to test those March highs; but the weak volume and the weakening Radar1 Fear/Greed indications  are a warning to me that this rally does not have a lot of conviction behind it.  Up to 1415 the path of least resistance right now is still up; however,  I will likely be selling that ‘double top’ if we make it there. Otherwise, if we get a confirmed breakdown below the up trendline on the chart below I will look to sell the likely pullback up to that trendline. 

Below are some charts of some stock 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_____

GFA

(This was on my unpublished watchlist last week and I am still bullish on this one this week. Last week it broke out above the down trendline, this week it broke above resistance. Triple Trender and all three Radar tools are bullish. It will probably test $3.00 again before continuing up to at least$4.30 . Note the Price Magnet® target at $4.50  )

PPL

( Here is a nice Pullback 23 leading into a breakout of the resistance line drawn by the Auto-Trendline tool. )

_____Shorts_____

AWI

( After a serious gap down, we have now retraced almost to the gap-fill. Note the bearish  Pullback 23 warning signal on the price chart right at the pullback to the short-term trender. )

SHFL

(A breakdown of the up trendline reinforced by a bearish Pullback 23 signal.  Notice the pullback into the bearish Triple Trender. Also note that this is a continuation of the bearish ‘Pullback Divergence’ which peaked in mid-July.  )

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 .

2018-01-08T07:42:25+00:00 August 13th, 2012|Hawk's Picks|