Friday 28 September 2007

Hilbert Sine Wave and Cyclical Top

The Hilbert Sine Wave crossed on Friday and signaled a cyclical turn down. The 135 minute chart is my primary time frame for swing trading the Emini. In the last year the 135 minute Hilbert Sine Wave had been invaluable in identifying turning points. Here's Friday's chart:

Hilbert Sine Wave Image

Hilbert Sine Wave on 135 Minute Emini Chart

Emini cycle highs and low played out nicely from the end of August to mid September. Then we had the Fed Rally that took us into a Trend mode. This Trend moves typically ends with a pull-back followed by a Completion move. These Completion moves are labeled "END" automatically using TradeStation code.

The Completion move does not mean we're in a down trend now. Far from it. Looking at the higher time frames (daily and weekly), we continue to be in an up trend. However, it does mean that tradeable Cycle moves should return to the market.

Given we're in an uptrend the Cycle Lows should be better entry points than Cycle Highs. But I'll still take the Short signals that the Hilbert Sine Wave gives.

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