Wednesday 6 June 2007

Emini approaching John Ehlers' Hilbert Sine Wave turning point

Emini John Ehlers Hilbert Sine Wave Image

The Emini closed down 17.25 points at 1,516.50 on Wednesday. We decided to take profits on our remaining short position in the September 2007 Emini contract at 1,532.00 for a gain of 22.50 points. This last trade has worked out nicely with half our position exited at the 10 point profit target and the remaining half exited after seeing exhaustion volume for a 22.50 point profit.

The chart above shows John Ehlers' Hilbert Sine Wave indicator which has been very accurate in timing the last few swings in the Emini. We're about to cross over (circled) and start looking for the beginning of an up move. However, we have yet to see climactic volume on the downside.

Although today's volume was heavy at 1.8 million contracts traded, most of that was in the early morning as the down move got underway. In addition the Adjusted Trading Index (TRIN) reading was -69 and did not reach extreme levels (< -100). So the Emini might not have bottomed quite yet.

Bond Market Turning Points Image

How strong any upswing will be is the big question. Last week's Commitment of Traders reading was very positive. However, the bond market is extremely weak, as you can see in the chart above, and we've just passed the 20 day delayed turning point discussed previously.

US Dollar Japanese Yen Image

In addition, the US Dollar / Japanese Yen exchange rate has just broken a significant upward trend line, circled in the chart above. This signifies a lack of confidence in US markets and overseas investors taking profits.

Remember Emini rollover day tomorrow and good luck in your trading.

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Filed Under John Ehlers

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