Today the eMini S&P futures are on the Sell Short day of the Taylor Trading Technique cycle. The TTT is all about anticipating trend changes; when we are able to anticipate market turns we can more easily identify trade opportunities.
Stock index futures rallied on Thursday and Friday. The eMini S&P futures made a bottom and rallied on Thursday, the Buy day of the Taylor Trading Technique cycle (I wrote a post about that HERE.) Friday saw upside follow through on the Sell day of the TTT cycle. This meant we would look for a TTT Sell Short day for today.
There was still more rally last night as the Dec. eMini S&P futures made an overnight high of 1970.50. I usually wait to trade the stock index futures after the 8:30 AM pit and stock market open. Overnight highs and lows are often valuable “reference prices” for Taylor Trading Technique trades, as the day session often retests intraday highs and lows; failure to move through these levels are often TTT trade signals.
That’s what I was looking for when I wrote this morning’s watch list for Swing Trader’s Insight (read that HERE). I wrote that we should watch the 1970.50 overnight high as a reference price; a failed attempt to rally above there (if it occurred) would be a trigger for an aggressive TTT Sell Short day entry.
The eMinis made that rally right after the 8:30 open, and traded around that level until around 8:50, when they began to sell off. This was the first opportunity to short it, as this was the rally failure we were looking for. The initial stop loss went above the session high of 1971.00- I like to use a stop of 6.00 to 8.00 for the eMini S&P.
The downside momentum increased as the morning went on; the “standard” Taylor Trading Technique Sell Short day level of 1964.50 (previous session high) was hit around 9:20 AM. The session low of 1959.25 was made just before 10 AM; a one tick low of 1959.00 made around 10:25 AM could have been a signal to take some profits if you were so inclined.
Essential Guide for Futures Swing Trading
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