Hawk’s Scan Sentry Report March 4
A lot of market bystanders these days want to know “How do you jump onto a raging bull?”. Many watched the January/February rally from the sidelines, some doubting it, and others waiting for a pullback to jump into. Some news junkies may have even tried to short the early 2012 rally. Well, if you ask a rodeo cowboy how to get on a raging bull he’ll tell you to get on it before it starts raging… and then hang on like hell! In one way the rodeo bull is a really good analogy… that “ lil’ doggie” is going to buck and bounce and do everything he can to throw you off the ride…Just like the markets we trade. Those rodeo pros have a visceral understanding of volatility!
A month or so ago I expressed my bullish sentiment, and started accumulating positions to hold onto for swing trades…. Even so, I was further behind the trend than I like to be. I am still bullish for the long run, but given that the market has been trending for several months now, I’m now scanning for pullbacks in the trend for my trading opportunities. I have several types of pullbacks I look for which will be demonstrated in the charts below. One of my favorites is the combination of an oversold signal in Trend Exhaustion1 (R2) with a Pullback 23 signal. Another good low risk set up is to look for a Trender Pullback after the Triple Trender has synchronized; or, if you want confirmation, wait for the short-term Trender of the Triple Trender to reconcile the Triple Trender synchronicity. A Flag pattern is another good pullback in the trend pattern. I also like to scan for pullbacks to a trendline with my Trendline Signals indicator. Fortunately I have scanning tools which match the charting tools to help me find some of these set-ups.
Let’s take a look at a few of the stocks from my watch list this week and I’ll show you what I’m talking about. If you have any questions about any of the indicators on the charts below, you can find an indicator legend at http://www.janarps.com/main/images/upload/BlogLegend.pdf
(Here we see a confluence of a Trender Pullback into the long-term Trender, a Pullback 23, and an Oversold Trend Exhaustion1 (R2). The oversold Radar2 valley creates a “Pullback Divergence” also known as a “ Trend Divergence”).
(Note the Pullback 23 and the simultaenous overbought Trend Exhaustion1 signals after a pullback into a recently short Triple Trender. Also notice the ‘Trend’ divergence in Radar 2 Price Leader. I also call this type of divergence a ‘Pullback Divergence’).
May the trend be with you,
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