Getting High on the Market

//Getting High on the Market

Hawk’s Scan Sentry Report February 13

As predicted several Scan Sentry Reports ago the S&P 500 futures contract broke through resistance at 1330 and then quickly raced to test the next resistance level at 1350 (please see “Finding Divergences the Easy Way” Jan 16). We have pulled back from that level and 1330 is now support. After examining historical recoveries from previous market crashes I expect the S&P to eventually break through 1350 and enthusiastically test new highs.   Of course it could just as easily go down; the market doesn’t care what I expect. That’s why I always try to be prepared in my short term trading for a full gambit of possibilities.

Not surprisingly  on many of the charts I’m studying this week I’m finding new highs. Therefore, in this report I will endeavor to demonstrate how I discriminate between what I perceive as failed highs which represent shorting opportunities and new highs which may be breakouts from congestion with bullish potential.

My primary tools for culling out failed breakouts are divergence analysis using the Radar1 Fear/Greed Indicator and the Radar2 Price Leader. I also look for signals from the Arps Trend Exhaustion tools. For potential bullish positions I like to see strengthening Radar1 Fear/Greed and acceleration in the Radar2 Price Leader and/or a bullish Pullback 23 signal. The Triple Trender must be bullish as well.

Here’s an image of the Radar-Screen I use to sort my scans for trading set-up.

Let’s take a look at a few stocks that are on my watch list this week and I’ll show you what I mean….

_____Longs_____

ATW

(In this one we see a nice Pullback 23 coinciding with breakout to new highs after a recent pullback into the Triple Trender).

EFX

( Another breakout to new highs after a consolidation period in which the Radar1 Fear/Greed Indicator showed a lot more buying than selling . Radar 3 Trend Strength shows that we are already in a strong and sustained uptrend ).

_____Shorts_____

RAS

(Although this one also made new highs, Please note the Trend Exhaustion2 signal one bar ago combined with a Bearish divergence in both Radar1 Fear/Greed and Radar2 Price Leader).

SYY

(A synchronized Bearish Triple Trender after  bearish divergences in both Radar1 Fear/Greed and Radar2 Price Leader. Also note that the Radar3 Trend Strength has 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 .

2018-01-08T08:01:11+00:00February 13th, 2012|Hawk's Picks|