Hilbert Sine Wave (Emini 135 min)
The Emini closed up 1.50 points at 1,448.50 on Wednesday. Volume was very low today at 0.8 million contracts traded and the 1,451 level provided resistance for a second day. However, a cyclical turning point has been reached in the John Ehlers Hilbert Sine Wave indicator, shown on the chart above. Volume will probably be low again tomorrow with the Easter break and there might be some profit taking.
From a technical perspective the Emini looks very strong. The Composite Trend Oscillator, mentioned in the last post, is still pointing up. We've had a trend line break with gap up. The Emini is sitting just under 1,451 and looking able to close the previous gap down in late February (1,451 to 1,460). Lastly, the US Dollar has strengthened against the Japanese Yen, showing overseas investors willing to buy US financial assets.
However, the Emini trend could change next week. By mid-week the Composite Trend Oscillator will be in the over-bought region. The Bond market has been in a downturn for the last 3 weeks and the Emini is over-valued against Bonds. In addition, the middle of April is usually quite weak from a seasonal perspective.
Good luck Emini trading.