By the Taylor Trading Technique, today was the Sell Short day for the eMini SP futures, as stated in last night’s Swing Trader’s Insight update. Thursday’s narrow range was a sign to be cautious but the Sell Short day setup ended up working well.
If you want to understand the TTT cycle for this week, it was as follows. Tuesday was a breakout setup, which gave a rally (TTT Buy day) on Wednesday. Thursday was an “exit breakout buys” day. We would potentially look for a TTT Sell Short day however Thursday had a bullish pattern, yielding a Sell Short day for Friday.
The reference price for today’s Sell Short day was the previous session high of 1955.00. A rally above that level would be a heads up to look for a downside reversal and a move below the reference price would be the trigger for a short sale.
In the premarket trade the eMini S&P futures traded above Thursday’s high of 1955.00. This gave us our signal to look for a short sale when the stock market and S&P pit opened at 8:30 AM. It remained above that level until about 9:45 AM as news started to come out about the new actions in the Russia / Ukraine conflict. This led to a quick selloff, and the move below 1955.00 triggered a short sale at that time.
The initial stop loss went above the session high of 1961.00. It quickly sold off following our short sale, reaching the previous session low around 9:55 AM. Holding this level was a signal that a low was in so we should cover shorts.
If you covered shorts, you could look to short it again on another break of Thursday’s low. Thursday was an NR7 day, and the previous session low is a standard reference price for a breakout sale.
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.
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