Technical Analysis for Trading Dads

//Technical Analysis for Trading Dads

Hawk’s Scan Sentry Report June 18

As Father’s Day passes, I would once again like to acknowledge the precious gifts my father, Jan Arps, has left for me… and for you. His gift to each of us includes his keen insight into the ‘personality’ of the markets that we like to trade combined with his ability to synthesize sophisticated mathematical calculations with a creative perspective on technical analysis. This singular mindset has created some of the most insightful technical  analysis tools available to market traders. These include the Fear/Greed Indicator (Radar1), the Price Acceleration Oscillator (Radar2) and the Arps Trender as well as many other tools which are the mainstays of many traders’ systems. Even more importantly,  my father he has always been supportive and patient with me and eager to inspire a lifetime of continuing education… Thank you, Jan Arps.

Now, let us get onto the analysis of the markets. It looks like the market indexes are playing out more or less as we have been expecting the last several weeks.  First,  looking at the weekly S&P chart, we have been watching a ‘Type II’ Bullish Pullback divergence forming between the index price and the Radar2 Price Leader as well as with the Arps Fear/Greed Indicator (Radar 1). This type of divergence is identified when the oscillator makes lower lows than in the previous pullback while the price makes higher lows.  While this weekly pullback divergence has been forming we have been able to confirm the bullish pullback by looking at the daily chart where a bullish Pivot divergence formed within this weekly pullback. That bullish pivot divergence was pointed out in last week’s posting of this blog.  Currently, on the daily charts, we are seeing the Triple Trender bullishly synchronized, and the Radar1 Fear /Greed Indicator showing bullish strength for the first time in months, but our Radar3 Trend Strength does not yet confirm . Furthermore, we are seeing short term bearish signals from the Trend Exhaustion 1 and Pullback 23 indicators.  My conclusion, therefore, is that over the next several weeks we could likely see more upside in these indexes than down; but in the shorter term I am preparing for a potential regression.

Let’s take a look at some of the set-ups I’m looking at in both directions this week. If you have questions about the tools on the charts you can find information about these indicators at this link.

_____Longs_____

SCCO

(A breakout of the down trendline after a bullish pivot divergence in the Radar oscillators. Note that the Triple Trender and the Radar3 Trend Strength Indicator are both bullish now, and that Radar 1 Fear/Greed is making higher highs. )

NU

(This one has just broken out to new highs above the $37.50 resistance level. Radar1 Fear/Greed is making new highs as well. Watch out though, we may get a bearish  overbought Radar2 Price Leader signal soon. This stock is in the Utilities sector which has been one of the strongest sectors over the last few months as the markets have been correcting. )

EXEL

( A breakout above the down trendline as the Triple Trender synchronizes bullish. Also note that the Radar3 Trend Strength Index has just turned bullish and that the Radar1 Fear/Greed indicator is making higher highs. )

_____Shorts_____

ETP

(A bearish pullback 23 signal accompanied by an overbought Trend Exhaustion 1 signal This is a nice pullback to the breakdown price of the Bear Flag .)

PCP

( Here we see the combination Pullback 23 and Trend Exhaustion 1 overbought signals .)

EPD

(This is another Trend Exhaustion 1 overbought signal combined with a bearish pullback 23 after a pullback to the Bear Flag breakdown price.)

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 .

2018-01-08T07:49:29+00:00June 18th, 2012|Hawk's Picks|