Electric signals are acquired and analyzed in order to monitor the underwater arc welding process. Voltage break point and magnitude are extracted by detecting arc voltage singularity through the modulus maximum wavelet (MMW) method. A novel threshold algorithm, which compromises the hard-threshold wavelet (HTW) and soft-threshold wavelet (STW) methods, is investigated to eliminate welding current noise. Finally, advantages over traditional wavelet methods are verified by both simulation and experimental results.