Cover story on the weekend Business Section of the Sydney Morning Herald (my local newspaper) reads “Ben Bernanke and his central bank heads off a depression … the US Federal Reserve has, so far, saved the American economy from a precipitous collapse.”
So that’s alright then – equity markets down 50% and 5.7 million jobs lost, but disaster averted. Ha – main stream media coverage of what is going on and their lack of insight continues to astound me. I’m sure your local business news is equally upbeat.
But here’s the point – the media coverage and general mood right now is universally bullish. Our job as Speculators is to forecast changes in the psychology of the market. Here is what my charts are saying:
TRIN Indicator and Oscillator (Emini daily)
Friday’s adjusted TRIN value was -26. Although the market was up, this was a weak day with more selling volume than buying. The TRIN Oscillator has now turned down.
TRIN, Put Call Ratio and Smart Money Oscillators (Emini daily)
The Put Call Ratio and Smart Money Oscillators have also turned down.
TRIN Indicator System (Emini daily)
And the Better TRIN Systems have signalled short. These can occur in clusters, so this might be the first in a cluster of Short signals.
Hilbert Sine Wave (Emini weekly)
My longer term charts show we’re at a critical junction. We’re about to have a Hilbert Sine Wave cyclical cross on the Emini weekly chart. This will signal a PullBack and the resumption of the down trend. This might happpen this week or the next – the critical Emini level to watch is 879.
Hilbert Sine Wave (NASDAQ weekly)
We’ve already had a crossover on the NASDAQ weekly chart – which appears to be the weakest market. The weekly bar also looks like a Doji candlestick pattern – which is typically an indication of market indecision and possible turning point.
Declining Upward Volume Momentum (Emini 135 minute)
Lastly, a new chart of the Better Momentum indicator (not released yet). This is an updated version of the traditional Momentum indicator that is based on Volume not price. It shows this advance is being made on successively weaker Buying volume.
Next week will be critical. Good luck with your Emini trading.