As Hannibal from the A-Team used to say: "I love it when a plan comes together." We had coincident turns on the TRIN and Put Call Ratio oscillators on Monday and they caught the top nicely. These really are leading indicators – see the chart below.
TRIN, Put Call Ratio and Smart Money (Emini daily)
This chart is typical and shows the trade-offs between these swing trading oscillators:
- TRIN oscillator usually turns first but there can see small "kinks" in the indicator
- Put Call Ratio oscillator usually turns next and is a smoother indicator
- Smart Money oscillator then turns last but is a much smoother indicator
Now, don't get me wrong – I'm not trying to talk up these indicators. Yes, this was a good signal but nothing is perfect and nothing works all the time. I use these swing trading oscillators because they're the best I've found.
Hilbert Sine Wave (Emini weekly)
Looking forward I think the weekly chart above is significant. It shows a cyclical top forming with the Hilbert Sine Wave. It has shaped my thinking with the medium term cycle analysis. But other markets have yet to confirm another drop:
- Bond oscillator is over-bought but Bonds have been treading water for the last 3 weeks and not broken out of their range – so we don't have a directional signal yet
- Commitment of Traders oscillator has peaked but COT reading has not turned negative – so the Professionals are not signaling a large drop
- US$ versus Japanese Yen is back down to 103 and found support with a cyclical cross on the Hilbert Sine Wave – again no clear signal down
So, those are the longer term charts I'm watching. Final point, today's volume was high at 2.4 million contracts traded. Large exhaustion volume and Professional buying came in around 1,390. We should see lower range, basing action tomorrow.
Good luck with your Emini trading.