The Emini closed up 11.00 points at 1,533.50 on Wednesday. Huge 22.25 point rally from the low with well above average volume at 1.6 million contracts traded. Classic Larry Williams Oops trade today – with the open below yesterday’s low and short covering driving the market up all day.
The long trade entered yesterday has worked out well. Took profits on half the position at our 10 point profit target. We’re still long on the remainder of the position.
This upswing is not over yet and based on John Ehler’s Hilbert Sine Wave has at least a couple of days to go. We are also approaching a Bond market turning point that happened 20 days ago, as shown on the chart above. The vertical blue line shows where the Bond market was 20 days ago.
I have written before about the 20 day lag between the Stock and Bond markets – in fact I recently wrote a long article about Bond inter-market analysis here but have not had the opportunity to reference it before today. The article discusses this lag, explains how to use TradeStation to do inter-market analysis and includes FREE indicator code.
The important point is that we potentially have a cyclical top coinciding with a Bond market turning point early to mid next week. We’ll have to see how this turns out.