Emini and Hilbert Sine Wave (2,097 tick)
I’m a big fan of John Ehlers Hilbert Sine Wave. The Emini chart above shows how the Sine Wave caught 4 short entries (5 if you count after hours) day trading today.
When using the Hilbert Sine Wave I’ve found that tick charts work best. By contrast, for volume patterns I’ve found that time based charts are better.
When day trading I use multiple time frames – 233 tick, 699 tick and 2,097 tick – and I include the after hours data in tick charts. The 233 starting point is chosen because it’s a Fibonacci number. Then each higher time frame is 3 times the lower time frame. So the 2,097 tick chart is 9 times (3 x 3) larger than the 233 tick starting point.
The usual multiple for moving from lower to higher time frames is 5. This was probably chosen because of the daily to weekly relationship; it’s also close to the weekly to monthly relationship. However, in practice I’ve found that 3 times is faster at identifying significant events coinciding on multiple time frames.
The day trading entry points shown on the chart above coincide with turning points on the Hilbert Sine Wave shown on the lower pane. As you can see, when the trend is persistent the Hilbert Sine Wave does a great job of catching pullbacks in trend.
Emini Exhaustion Volume and TRIN Divergence
Today we got the exhaustion volume or volume climax that we were looking for yesterday. The Better Volume indicator colors the volume bars red when both the bar’s range and volume are high, like today.
In addition, we also got a bullish divergence warning signal on the Better TRIN Indicator. The adjusted TRIN reading was -171 which is better than the -238 of a couple of day’s ago, yet we made a lower low – setting up a bullish divergence warning signal. Conditions appear to be in place for a temporary halt to the decline.
Good luck with your Emini trading.