Seasonal Turning Points

//Seasonal Turning Points

Hawk’s Scan Sentry Report June 25

Those of you in the Northern hemisphere, welcome to summer; those in the Southern, welcome to winter.  Those of you who spend all of your time in your office or in front of your computer…. you might consider getting outside a little bit and enjoying whichever season you are in. Trading the markets can be consuming and addictive; don’t forget why you are doing it!

To begin our technical analysis this week, let’s take a look at the daily S&P futures contract again.  You can see that the Triple Trender is confirming neither a bullish nor a bearish trend. Look at the Radar3 Trend Strength Index; at blue -3.4  it also indicates that there is no significant trend strength in either direction.  So we have to look for other indications to identify our bias for the near-term market movement. One clue is the recent bearish Pullback 23. Notice that we also have a very nice bearish Pivot Divergence in the Radar2 Price Leader over the last 7 or 8 bars. Also note the longer term bearish “Pullback” divergence indicated in the Radar1 Fear/Greed indicator.  Note also that we recently saw a bearish Trend Exhaustion 1 overbought signal which has not been violated by a higher close. As a consequence of this analysis and these signals, my starting bias for this week is bearish.

In order to identify the symbols for my equities watch-list this week, I scanned for long set-ups by looking for stocks that bucked the big sell-off on Thursday. Most of the equities that I came up with are in the healthcare sector which outperformed the S&P last week by 1.5%. For my ‘sell-short’ list one of my scans looked for stocks that recently showed a bearish Pullback 23 and a bearish Trend Exhaustion 1 signal. I call this set up a Trend Exhaustion 123. This matches my analysis of the market in general.  I also searched for, and found, some symbols showing recent bearish pivot divergences accompanied by Fear/Greed indications showing bearish strength. This gives me a list of stocks that could potentially be in the early stages of a bearish trend.

Let’s take a look at some of the specific equities that are on my watch-list for this week and why they are there. If you have any questions about the indicators on these charts please follow this link to a legend describing these tools.

_____Longs_____

MRK

(A breakout of the horizontal resistance line. Radars 1, 2, and 3 and the Triple Trender are all getting stronger.  This bullish stock is not following the general market trend!)

MMR

(After a breakout at around $10.00 and a retest of that level we see increased buying force in the Radar 1 Fear/Greed  and early trend identification in the Triple Trender and Radar3 Trend Strength ).

ECL

(Another breakout of resistance followed by a pullback to test the breakout price. It looks like a bullish Pullback 23 is setting up.  The last bullish thrust showed more buying strength than the previous ones.)

_____Shorts_____

PENN

(Here we have a double top creating a bearish pivot divergence with Radar1 Fear/Greed and Radar2 Price Leader. Radar1 Fear/Greed and Radar3 Trend Strength are both already showing bearish indications. All of this combined with a bearish Pullback 23 provides an early entry into a potential bearish trend.)

ELP

(Pullback into the Triple Trender with a bearish Pullback 23. Note that Radar1 Fear/Greed has just turned bearish again. ).

XPO

(A bearish Pivot divergence. Radar1 Fear/Greed and Radar3 Trend Strength both already bearish even though the price is still in the upper 85% of it’s 52 week channel. This is another opportunity for an early entry into a potential bearish trend)

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 .

2018-01-08T07:46:53+00:00June 25th, 2012|Hawk's Picks|