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.
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….
( 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 ).
May the trend be with you,
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