Hilbert Transform - SineWave

Overview

The Hilbert Transform - SineWave indicator, developed by John Ehlers and featured in "Rocket Science for Traders," transforms the dominant cycle phase into two smooth sine wave outputs. The primary Sine output represents the current position within the market cycle, while the LeadSine output is advanced by 45 degrees, providing early signals of impending cycle turns. These waves oscillate between -1 and +1, making cycle tops and bottoms visually obvious.

What sets this indicator apart is its ability to differentiate between cyclical and trending price activity. The sine waves are designed to not cross during trending periods - when you see the waves turn without crossing, it indicates the market has entered a trend. This unique feature combines the best characteristics of oscillators (identifying overbought/oversold in cycles) with moving average properties (signaling trend starts and ends).

Interpretation & Trading Signals

Wave Components:

  • Sine: Current cycle position as sine wave (-1 to +1)
  • LeadSine: Sine wave advanced by 45°, crosses 1/8 cycle early
  • Range: Both oscillate between -1 (cycle trough) and +1 (cycle peak)
  • Adaptation: Frequency adjusts automatically to dominant cycle

Trading Signals:

  • Buy Signal: LeadSine crosses above Sine (cycle bottom turning up)
  • Sell Signal: LeadSine crosses below Sine (cycle top turning down)
  • Always In Market: Signals switch from long to short and vice versa
  • Cycle Confirmation: Clear crossovers indicate cycling market

Market Mode Detection:

  • Cycling Market: Waves cross regularly at extremes
  • Trending Market: Waves turn without crossing - trend signal!
  • No Crossover: When sine turns up without crossing bottom = uptrend starting
  • Hit Rate: Typically achieves ~70% accuracy in cycling markets

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

Related Indicators

Bandpass Filter

Technical analysis indicator

Correlation Cycle

Technical analysis indicator

Detrended Oscillator

Technical analysis indicator

Decycler

Technical analysis indicator

Empirical Mode Decomposition

Technical analysis indicator

Hilbert Transform - Dominant Cycle Period

Technical analysis indicator