Tuesday 8 July 2008

Cyclical Low in Weekly Chart Approaching

The Emini jumped 22 points today on very high volume of 2.8 million contracts. It looks like a significant inflection point is approaching with crude oil topping out, the bond market rallying and the US dollar strengthening against the Yen, Euro and Pound - all bullish signs for US equities.

I've been watching this weekly Emini chart for a while now. It shows a long term cyclical low is approaching. However, we're still in a down trend on the daily and 135 minute Emini charts. This down trend won't be complete until we get a pullback and final push down with "End of Trend" signal. My best guess is the pullback is underway now.

Emini Cyclical Low Image

Cyclical Low Approaching (Emini weekly)

The chart below is interesting and shows how the Better Sine Wave (my version of the Hilbert Sine Wave) caught the top of the Crude Oil market with an "End of Trend" signal. This was confirmed by low volume up bars, indicating lack of demand.

Crude Oil Cyclical Top Image

"End of Trend" Signal in Crude Oil (daily chart)

It's so easy to follow multiple markets using charting platforms today. Sometimes it clouds decision making and for that reason I restrict my inter-market analysis of the Emini to just three: