"End of Trend" Warning Signal (Emini 135 minute)

Here’s the original Multiple Time Frames post. Good luck with your Emini trading.

P.S. NinjaTrader version of Better Sine Wave to be released on Friday.

We could be lining up for one of my favorite Multiple Time Frame setups. In trading with Cycles, one of the most important principles is that "Trend moves in lower time frames are equivalent to Cycle moves in higher time frames."

What I’m looking for is an "End of Trend" warning signal in the Lower time frame and a Cycle turning point in the Higher time frame. This works in any combination, for example, 233 and 2,097 tick or 5 minute and 45 minute charts. In this example, we’re looking at a longer term trade with the 135 minute and weekly Emini charts.

Multiple Time Frame: End of Trend in Lower Time Frame (Emini 135 minute)

In the 135 minute chart we came close to breaking the PullBack level on Friday. But then rallied strongly on Monday above it. We’re now on the way to an "End of Trend" warning signal when the Better Sine Wave crosses – on Tuesday or Wednesday.

Multiple Time Frame: Cycle in Higher Time Frame (Emini weekly)

The Higher time frame is the Weekly Emini chart. This is roughly 9+ times above the Lower time frame (135 minute x 3 = Daily and Daily x 5 = Weekly). Here we’ve just formed a Cyclical turning point, which also happens to be a PullBack in down trend. So we could have an "End of Trend" signal lining up with a Cyclical turning point in the Higher time frame. This would confirm a medium term Short trade.

Low Volume Up Day (Emini daily)

To add to the story, Monday was a Low Volume Up Day on the Emini, showing a lack of Demand to push strongly though the 925 resistance level.

Low Volume Up Day (NASDAQ daily)

This was probably better illustrated with the daily NASDAQ chart, where you can see the Volume was particularly weak. The NASDAQ tends to lead the broader market at turning points, so I’m watching activity on this market closely.

If you didn’t catch it earlier the Commitment of Traders has been updated here.

Good luck with your Emini trading this week.

Nice Short trade setup using Multiple Time Frames on the open today. The chart below shows the 3 time frames I use for Emini day trading: 233, 699 and 2,097 tick bars. The vertical dotted red line in each time frame shows the open.

Multiple Time Frames Setup (Emini day & night sessions)

On the 2,097 tick chart (highest time frame) we had an "End of Trend" warning signal from the Better Sine Wave. There was also High Volume Churn (blue bars) showing Professionals were taking profits and re-positioning Short.

On the 699 tick chart (middle time frame) we had a slight "Overshoot" of the cyclical turning point and more High Volume Churn (blue bars). On the 233 tick chart (lowest time frame) we also had an "End of Trend" warning signal from the Better Sine Wave. Plus High Volume Churn, highlighting the resistance at 855.

Strong moves come when the multiple time frames align like this. This Short was good for 9 points – I was out after 4 when my target was hit and off to bed for me.

Sydney Surf Last 3 Days

In case you’re interested, we’ve just had 3 days of perfect end-of-Summer surf here in Sydney. Medium swell with offshore winds – doesn’t get much better than this.

Good luck with your Emini trading.

Hope your Emini trading is going well. I’ve had a lot of interest in my version of the Hilbert Sine Wave (Better Sine Wave) recently. So I thought I’d post a quick article on how you can use the Hilbert Sine Wave with multiple time frames.

The image below shows a TradeStation workspace with 12 Emini charts. I’m using @ES.D, the continuous Emini contract with day session data only.

Multiple Time Frames and Hilbert Sine Wave

The multiple time frames start with the lowest time frame (1 minute) in the top left and progress down in columns until you reach the highest time frame (weekly) in the bottom right. The time intervals are chosen so that there are always a whole number of bars per trading day. For example, there are exactly five 81 minute bars in a trading day. The 12 time frames charted are, in ascending order:

• 1 minute
• 2 minute
• 3 minute
• 5 minute
• 9 minute
• 15 minute
• 27 minute
• 45 minute
• 81 minute
• 135 minute
• Daily
• Weekly

The first advantage of seeing all time frames at once is that trend moves in the lower time frames can be placed in the context of cycle moves in higher time frames. This is a key principle of cycle analysis and multiple time frames – when cycles fail in the lower time frames and break out into trend moves, these trend moves are seen to be cycle moves in higher time frames.

The second advantage is that cycle moves sometimes fail in the lower time frame and end up over-shooting but then reverse because they have been "caught" by the cycle developing in the very next higher time frame. A recent example is shown below.

Hilbert Sine Wave (Emini 81 minute)

The 81 minute Emini chart recently had almost perfect Hilbert Sine Wave support and resistance levels (labeled "PB" for pullback and "END" for End of Trend). But then in the next 2 cycle turns, the Emini overshot the support and resistance levels – shown by red and white dots.

Hilbert Sine Wave (Emini 135 minute)

When looking at the very next higher time frame – the 135 minute chart – you can see that the first group of cycle turns didn’t catch the top and bottom as well as the 81 minute chart. However, the last cycle group picked the resistance and support levels nicely.

What I see is the predicted cycle turning point in the 81 minute chart being "overshot" and "caught" by the stronger cycle in the next higher time frame. Of course, looking at the volume patterns at these turning points will also allow you to gauge whether the cycle turning points will hold – but that’s another article!

Good luck with your Emini trading.

We’ve got Emini cyclical lows on multiple time frames. The Emini charts below show we have Hilbert Sine Wave cyclical lows confirmed on the 45 and 81 minute charts, and cyclical lows approaching on the 135 minute and daily charts.

Hilbert Sine Wave Cyclical Low (Emini 45 minute)

Hilbert Sine Wave Cyclical Low (Emini 81 minute)

Hilbert Sine Wave Cyclical Low (Emini 135 minute)

Hilbert Sine Wave Cyclical Low (Emini daily)

When this happens, typically we have the start of a large move. Mostly the move is in the direction of the cycle – in this case the beginning of a new up trend. However, if the cycle lows fail the resulting break down will also produce a large move.

My best guess is that the move will be to the upside:

• The Better TRIN systems have signaled long
• The Bond market is in an up trend
• The US Dollar versus the Japanese Yen is also strong

The only caution is that the Commitment of Traders Oscillator is over bought and my last article said the momentum was more likely to the down side.

The interval of the charts above might seem like they’re chosen at random. But they are designed to catch cycle moves developing in different time frames. There are 9 complete 45 minute bars in a trading day; 5 complete 81 minute bars in a trading day; and 3 complete 135 minute bars in a trading day.

Good luck with your Emini trading and let’s see how this plays out.

The Emini has dropped 12 points to 1,250 in after hours in response to Apple’s (AAPL) earnings outlook. I don’t trade stocks but thought it might be interesting to post these 2 multiple time frame charts of AAPL.

Multiple Time Frame 1 – AAPL Weekly

The weekly chart above shows AAPL’s break into an uptrend at $70 and subsequent rise to $200. The Hilbert Sine Wave did a nice job of catching the end of the Pull Back (labeled PB on the chart) at $120 and then also picked off the end of the up trend (labeled END on the chart) when the $200 level was tested again.

When trading stocks with multiple time frames I suggest using the weekly chart to determine the major trend direction. Once you see an End of Trend signal then it’s time to start looking elsewhere for long trades.

Multiple Time Frame 2 – AAPL Daily

The AAPL daily chart shows a break into up trend at $125 – the same level that the weekly chart was signaling a Pull Back and resumption of the up trend. The final leg of the up trend was then under way and peaked at $190. We had a final cycle turn with a Pull Back and then End of Trend signal at $180.

So on multiple time frames (weekly and daily) we have End of Trend signals around the $180 to $190 level. Looks like the party is over and in after hours tonight AAPL is down over 10% to $149.

Good luck with your trading.

This last down move from 1,405 has taken me by surprise. I was hoping for a cyclical top turn on the Hilbert Sine Wave, which we didn’t get. Instead the Emini broke into a down trend on the daily chart shown below (white dot).

The question now is when will the down trend end?

Multiple Time Frames: Emini daily

I use multiple time frames to try and identify the end of a trend. The same principles apply if you’re day trading or position trading. I check one time frame up and one time frame down. I’m looking for either:

• A cyclical turn in the higher time frame, or
• An "end of trend" signal in the lower time frame
• With volume confirmation (climax volume & high volume churn)

The time frames are a multiple of 3x different. For example, 135 minutes X 3 = 405 minutes, which is a daily chart. The higher and lower time frame charts are shown below.

Multiple Time Frames: Emini weekly

The higher time frame chart, weekly in this case, shows we’re still in a cyclical down move. The cycle low still looks a ways off as the Hilbert Sine Wave has not crossed the zero line yet.

Multiple Time Frames: Emini 135 minute

The lower time frame chart, 135 minute in this case, shows we’re still in a down trend move. Trend moves typically end with a counter-trend pull back followed by a final push in the direction of the trend. This final push is equivalent to an Elliott 5th wave. The Better Sine Wave plots an "end of trend" signal automatically on the chart.

Volume Climax and High Churn (Emini 9 minute)

Today we had climactic volume down at the beginning of the day followed by high volume churn at the end of the day. High volume churn happens when the volume is high but the range is low – showing that buyers are absorbing the selling and stopping price declining.

My best guess is we’ll get a bounce tomorrow morning based on this volume pattern. But hit resistance before we finally complete this down leg.

Good luck with your Emini trading.

Very quiet day on Friday. The Emini closed up 2.75 points at 1,400.50. It was an inside day, the range was only 7 points and the volume was only 1.2 million contracts.

We’re still in an up trend and at least a couple of days away from a turning point – in my opinion. Thought it might be useful to re-cap my 3 swing trading charts to illustrate.

Hilbert Sine Wave (Emini 45 minute)

My lowest time frame for swing trading is the 45 minute chart. This shows we’ve broken into an up trend and about to make a cyclical low above resistance at 1,390. We should push higher on Monday.

Hilbert Sine Wave (Emini 135 minute)

The next time frame up is the 135 minute chart. This is my primary time frame, or anchor chart, for swing trading. This signaled the last low turning point nicely at 1,370 and is approaching a high turning point. However, we could get an over-shoot if the up trend is strong.

Hilbert Sine Wave (Emini daily)

The highest time frame is the daily chart. The signals are less clear on the daily time frame because the data is a little noisier compared to the lower time frames.

However, we’re definitely now in an up trend and just made a cyclical low turn a couple of days ago. This pattern has to "complete" with a cyclical top turn and it looks like it’s a couple of days away.

If we keep pushing up, the next resistance level appears to be around 1,420. I’ll be looking for profit taking volume patterns (exhaustion volume and high volume churn) over the next couple of days.

Good luck with your Emini trading.