The Secret is Out

//The Secret is Out

Hawk’s Scan Sentry Report December 3

This week I want to share a secret with you, but you have to promise not to tell anyone else. I’m sharing this with you because you are one of our valued readers of this blog, and as such we are like family. So let’s keep this in the family. For your eyes only I will describe precisely how one of our best proprietary signals is generated.

You might have noticed on the charts I present each week a signal dot with “PB23” text above or below the dot. This is what we call a Pullback 23 and it identifies a pullback in a trend. It is generated by a confluence of conditions from two of our best proprietary indicators … the Radar2 Price Leader and the Radar3 Trend Strength Index. Combining the names of Radar2 and Radar3 we get 23, and the fact that it identifies a pullback in a trend gives it its name ‘Pullback 23’.  Here’s how it works. Shhhh…….

First we want to identify the orientation and strength of the trend. For this we use the Radar3 Trend Strength indicator which plots a histogram up or down identifying the strength and direction of the trend. The histogram is colored blue and pointing up when the market is trending upward, and it is pink and pointing down when the market is trending downward. However, if the color of the Radar3 indicator does not match the up/down orientation of the histogram this identifies trend weakness which could be a pullback in the trend. For example if the histogram is pointing down but the bars are blue, or the histogram is pointing up and the bars are pink this signals weakness in the trend which could identify a pullback opportunity.  Once the Radar 3 Trend Strength indicator has identified a pullback possibility, we look for price acceleration back in the direction of the predominant trend. For this we turn to the Radar2 Price Leader Acceleration Oscillator. This two line oscillator monitors the acceleration and deceleration of the price movement and thereby provides the quickest possible indication of impending changes in price direction. For a bullish pullback we are looking for an acceleration signal which is generated when the fast line crosses over the slow line. A bearish or decelerating signal is generated when the fast line crosses under the slow line. Once Radar3 identifies weakness in the trend and Radar2 identifies acceleration or deceleration back in the direction of the trend, that is when the Pullback 23 signal dot is generated. The chart below shows you how this works….

I want to show you how I am looking at a few of my favorite markets this week. On the charts below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

The Charts and Analysis

Index Futures:

NASDAQ

(I am seeing a bearish Trend Exhaustion 1 and Pullback 23. Although the Triple Trender has just turned bullish, Radar3 Trend Strength does not yet confirm this shift in trend orientation. If Radar3 Trend Strength crosses above the zero centerline then exit this trade.)

Equities Setups:

(Sell Short!) MRK– Merck & Co.

(A bearish pullback 23, Radar2 Price Leader also forms a bearish Pullback Divergence. Stop-loss is a close across the long-term Trender @$45.46)

Commodities:

GOLD

(The technical indications of this market show that, for the next week, the downside is still stronger than the upside. Note the Triple Trender is more bearish than bullish, as is the Radar3 Trend Strength Index. The Radar2 Price Leader also shows price still decelerating. Note the recent bearish Trender Pullback signal.) 

CRUDE OIL

(This is still a range bound market in an overall downtrend.  Until we break out of this range, the only trade opportunities I see are short term trades which fade the extremes of this range).

Forex:

EURUSD

(As noted last week this market is more bullish than bearish. I still expect to see this one grind upwards at least until it meets resistance at the down trendline.)

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 .

2018-01-08T07:13:21+00:00December 2nd, 2012|Hawk's Picks|