The Emini closed down 18.75 points at 1,385.75 on Friday. Another high volume day with 1.7 million contracts traded, large range of 20.25 points and closed on the lows. Sounds pretty bad and all the weekend commentaries are talking about further falls. However, take a look at the following two charts.
The chart above is my composite trend indicator. I use 4 non-correlated, leading trend oscillators and combine them in this one composite Emini indicator. As you can see, it turned up on Friday.
The Smart Money oscillator, John Ehlers Hilbert Sine Wave and Open-to-Close oscillator have all now turned up. The only trend oscillator not to have turned up is the Trading Index TRIN oscialltor which is heavily oversold.
Remember, the objective of this blog and my swing trading is to identify Emini swing trades that last between 5 and 10 days. I have no idea where the market is going to be in 3 or 6 months time, but I focus on where the market might be at the end of this week or next. Also bear in mind that in down trends trend oscillators will signal up turns early and down turns on time.
The second chart above is a little more complicated – sorry about that. It shows John Ehlers Hilbert Sine Wave on a 45 minute chart of the Emini. Breakout trends are signalled with price fails to follow the turn points – as in the morning of 27 February.
Trend moves then usually finish with a final push – in this case labeled "FirstPB" (first pull back) and then "Complete". I have found that when price continues further past this "Complete" level it can reach an exhaustion level – labeled "Complete X" (complete exhaustion). Strictly speaking this happens when the "fast" (red line) in the oscillator passes above zero and price has continued further down.
So, we have the trend oscillator turning up and a ‘complete exhaustion’ pattern. Will the professionals step in on Monday after some panic selling and gap down open? Good luck Emini trading.