Combining Signals in the Emini S&P Futures

This originally appeared as a blog post in Scott Hoffman’s Futures Insight Blog on Wednesday, May 23rd, 2012.

On Monday the stock index futures ended their Chinese water torture selloff and stage a good Taylor Trading Technique Buy day rally. Yesterday was the Sell day in the cycle. That’s what yesterday looked like — the two sided trade of a distribution day.

In the TTT cycle that meant that we should anticipate a Sell Short day for today. Yesterday there were a couple of additional setups as it was an NR4 day and a doji. While this makes sense for a distribution day it also meant that we could anticipate a breakout move today as well.

S&P Emini Futures

The breakout setup meant we expected a directional move today rather than an initial feint and reversal to the market’s main trend for the day. The standard reference prices for the breakout move were the previous session high and low — 1326.50 on the upside and 1307.50 down. A breakout trade would be triggered if either the high or low were taken out.

In this morning’s premarket trading there had already been a few moves under and back over yesterday’s low; it was hard to see it as a significant reference price this morning. Shortly after I got into the office it made a session low at 1302.25; we would use that low as a reference price for a continuation of the breakout move down.

S&P Emini Futures may 23

The short entry was triggered around 9:15 AM. There was a good morning selloff. In hindsight I should have tightened up stops further or taken profits after the 11:25 double bottom formed at 1294.00 but my hindsight is at least as good as the next guy’s. I kept my stop at break even and ended up scratching the trade.

I marked off three lows this morning — for other LBR followers, was that a “three pushes lower” move this morning?

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