Analyzing the Recent Highs

//Analyzing the Recent Highs

Hawk’s Scan Sentry Report August 26

The bears, they sold in May and went away… In June the ‘summer bulls’ came back to play… using the light volume to drive the price their way. The consecutive higher lows and higher highs confirm what the Triple Trender has been showing us (and I have been noting in this blog) since the middle of June;  that we have been trending up since that time with the steadiest part of that rally happening over the last 4 weeks on nearly half of the year’s average daily volume. Hey, the account balance doesn’t care about the volume. Rallies typically trade at lighter volume than sell-offs anyway.  So, as we predicted several weeks ago, the S&P e-mini futures contract finally ran some stops above the April 2 highs and has now backed off slightly from the double top which was formed by that event. I’ve heard some of the old-timers say “See a double-top… Sell a double-top”, which I stated as my plan in this article two weeks ago.  However, since the trend is clearly upwards, I expect to be ready to cover my shorts and buy a confirmed dip if I see the right confluence of indications. These could include a bullish Pullback 23 or a ‘pullback divergence’ if the market continues to back off this week; or a confirmed breakout of the resistance line to new highs if it doesn’t start falling seriously.  Notice that, although we are seeing the typical  Radar1 Fear/Greed pivot divergences  which accompany rallies like this, the Radar1 Fear/Greed value is actually considerably higher now than it was in April when we hit these price levels last time. If I see the Radar1 Fear/Greed  value exceed the alert-line at the previous oscillator high of 45.55 I’ll be convinced that this rally has some serious staying power.

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_____

WPI

(This is a good example of a breakaway gap from the down trendline to new highs accompanied by a nice Pullback 23 signal )

CTL

(A ‘Pullback 123’ which is a Trend Exhaustion 1 signal accompanied by a Pullback 23. As is often the case this creates a nice pullback divergence which is evident in the Radar2 Price Leader. Also note the general strength of the Bulls identified by Radar 1 Fear/Greed . The Wave counter shows that we are just completing a Wave 4 and we may be looking for a confirmed Wave 5 start.)

_____Shorts_____

DBD

(A pullback into the bearish Triple Trender which coincides with the down Trendline value. Also note the bearish pivot divergence in Radar 2 Price Leader at the resistance line. )

MNST

(A bearish Pullback 123 at resistance accompanied by a bearish pivot divergence in the Radar 2 Price Leader)

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 .

2018-01-08T07:41:41+00:00August 26th, 2012|Hawk's Picks|