The soybean futures rallied about 30 cents last week, closing on the weekly highs on Friday. The rally pushed up to a significant Fibonacci retracement level and set the stage for a trade opportunity for Monday.
The rally in November soybeans pushed the market up to resistance at 1085-2, a 50% retracement of the selloff from the 29 July high to last week’s low. As I’ve written before, these 50% retracement levels are often good reference prices, allowing us to see if a market move is likely to continue of fail and reverse.
Sunday night saw an advance in Nov. beans as they made a session high to 1088-0. This gave us two levels to watch for Monday’s day session. We could watch the market on a move back above the overnight high of 1088-0 and to see when if it moved back below Friday’s high of 1085-0 (our original reference price).
The 8:30 AM open was at 1082-0. By 9:15 it made a new session high of 1089-2 and then made ca double top there about 20 minutes later. The drop back below 1088-0 was the first setup for a short sale.
The first break held at Friday’s low of 1085-0 and a bounce followed. A subsequent move below 1085-0 came around 9:50; this was the “official” TTT short entry.
For either entry we could use a stop loss above the session high of 1089-2. The selloff caught on and by 10:35 it traded down to the overnight low of 1078-4; the first spot to consider taking profits. This area was taking out pretty quickly, and as patient (we try to be) TTT traders, we could stay short, with Friday’s low of 1071-6 as the next downside target.
Try Swing Trader’s Insight – for 14 Days
Swing Trader’s Insight – Trial - This swing trading resource is designed to help you improve your trading skills and make you aware of trends and new potential opportunities in the commodities markets. Regardless of your current skill level, access to this exclusive swing trading information will enhance your trading experience.
Swing Trader’s Insight – includes access to premium web content.
Swing Trader’s Insight – includes an email newsletter subscription.
Swing Trader’s Insight – trial lasts 14 days.
Essential Guide for Futures Swing Trading
In this guide, experienced trader and broker Scott Hoffman explains the trading methods he uses to analyze and trade the futures markets and to publish his trade advisory, Swing Trader’s Insight.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.