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
