Ask the Rodeo Rider

//Ask the Rodeo Rider

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  https://www.janarps.com/main/images/upload/BlogLegend.pdf

_____Longs_____

MR

(Here we see a breakout above resistance represented by the downtrend line following  the second pullback after the Triple Trender synchronized bullish… and a breakout of a Flag pattern! ).

EQY

(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”).

_____Shorts_____

QCOR

(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’).

OSK

(Here we have a breakdown from the uptrend line, all three Radar tools have just gone bearish, and the Triple Trender just turned bearish).

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 .

2018-01-08T07:57:37+00:00March 5th, 2012|Hawk's Picks|