Tuesday 17 June 2008

Cyclical Top Today

We've been waiting for a cyclical top and the pull-back in down trend to finish - see Friday's post on the Buying Climax. Today's action suggests this top is in and we're going to start testing the 1,340 lows.

I still remain bullish medium term and don't think this down leg will be too strong:

Commitment of Traders Oscillator is in the Buy zone
Bond market is down but not heavily
US Dollar versus Japanese Yen is holding up (although close to a cyclical top)

However, the only "fly in the ointment" is that the cyclical low on a weekly chart still looks some ways off - see chart below.

Emini Weekly Cyclical Low Image

Cyclical Low Approaching (Emini weekly)

Got a nice Short entry that caught the top just before the market opened. Thought these charts showing the Better Sine Wave on multiple time frames might be of interest - volume indicator confirmation is not shown. This is one of my favorite patterns.

Emini Cyclical Top Image