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Home / Futures Blog / Today’s Taylor Trading Technique Signal for the EMini SP Futures

Today’s Taylor Trading Technique Signal for the EMini SP Futures

October 2, 2014 by Scott Hoffman

Yesterday the eMini S&P futures made a big down move out of a breakout setup. By the Taylor trading Technique, we would anticipate a Buy day for the following session. The rally started relatively late in the session and followed an early plunge, but we did see the rally that the TTT told us to expect.

EMini S&P futures had a breakout setup for Wednesday; Tuesday was an NR7 and a doji day. This resulted in the big downside move on Wednesday. Pushing below the 100 day SMA at 1945.70 (the dotted blue line) added some panic to the session.

ESZ daily Oct 2

For the session following a breakout move day, the Taylor Trading Technique tells us to anticipate a TTT day in the opposite direction.  We look for a downside breakout day to be followed by a TTT Buy day and an upside breakout to be followed by a TTT Sell Short day. This is because a breakout move often pushes a market to a level that’s “too low” or “too high”, which prompts Taylor’s “smart money” traders to take advantage of the overshoot. (It’s like a buying or a selling tail, in Market Profile terms.)

So yesterday’s downside breakout and today’s TTT Buy day signal told us to look for early session follow through selling.  We look for this early selloff to run its course and then we go long when the market starts moving back up.

The previous session low is the standard reference price for a TTT Buy day. An initial move below the previous day low is a heads up to look for an upside reversal. We then look to go long when we have evidence that the market is moving higher, and stay long as long as the market moves higher. We should be patient and enter only when momentum favors our play, and then be patient to stay with the trade as long as momentum is in our favor.

After making a day session high of 1942.50, the market made a series of lower highs and lower lows until making the 1918.25 session low around 10:40 AM. As long as it kept making lower highs and lows we wouldn’t buy, as momentum was still down. The market started to rally after making that low however we still needed a signal that the momentum was to the upside.

There were two levels to use for confirmation of upside momentum. Aggressive traders could use the 11:30 AM high of 1928.50; a rally above this level would mark the first time the market took out a previous intraday high. This aggressive long entry came around 11:50.  The 1923.75 swing low was a good level for the initial stop loss, as breaking below there would end the new stretch of higher lows.

The standard TTT Buy day entry would be a move above the previous day low of 1933.75; this was triggered shortly after Noon CT. The rally has continued from there, with 1945.75 as the next rally objective (it also marks the 100 day SMA, adding to its significance.)

Swing Trader's Insight Essential Reference Guide Cover

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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Risk Disclosure

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.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: Swing Trader's Insight

About Scott Hoffman

Scott graduated from the University of Chicago in 1986 with a degree in Economics. After graduation, Scott worked on the floor of the Chicago Mercantile Exchange then moved upstairs, serving as the personal broker to a former chairman of the Chicago Board of Trade. There, he worked as a broker and margin manager, starting up the firm’s full service brokerage division.

Today, Scott serves as an educator and mentor for new traders, and as a trading partner and ally for experienced traders. The breadth and depth of Scott’s knowledge make him the “go to guy” for both retail and institutional traders.

Scott also publishes two futures advisories, Swing Trader’s Insight and Trade or Fade. He also writes the futures trading blog at www.futuresinsightblog.com. Scott has written articles for a number of futures publications and has done numerous futures trading seminars, including seminars for both the CBOT and CME.

Scott offers his customers the knowledge he has gained from his more than 25 years of experience in the futures business. Scott is accepting new clients at this time.

Scott lives in suburban Chicago with his wife and three children. In his free time he enjoys coaching his children’s sports and various other athletic activities.

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Risk Disclosure

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.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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