Thursday 28 December 2006

John Ehlers Sine Wave Crossover

The Emini closed down 3.25 points at 1,433.75 on Thursday. Small range, low volume, inside day. Although there was a cyclical top today the end of day buying may see a bounce tomorrow.

Emini John Ehlers Sine Wave Image

The Emini opened down 0.75 points at 1,436.25. The market was volatile making a "w" pattern - down, up, down again and then up again. The low was 1,432.00 and high was 1,438.00, making the daily range only 6.00 points. The market eventually closed at 1,433.75 after a relatively large volume rally at the end of the day. Total daily volume was below average at only 0.4 million contracts traded.

John Ehlers Hilbert Sine Wave indicator

We've had 10 profitable sine wave crossovers on the long side. Now if we're at the beginning of a correction down wave this is the first cross over on the short side. The Emini has been in a long uptrend since July which is a classic Elliott wave 3. This wave should end with a downside Elliott wave 4 that will bottom and then turn into a final blow off Elliott wave 5 to the upside. I believe this fourth wave has begun but is being held up by end of year "window dressing" by fund managers. Once into the New Year we should see this fourth wave to the downside proceed.

If you'd like to get the code for John Ehlers sine wave indicator click the image below to check out his latest book.