Soybean futures had a breakout setup for Monday, Nov. 10, as might be expected for a USDA report day. The report (eventually) led to a selloff on Monday, and the market closed near the session low.
The Taylor Trading Technique tells us to anticipate a Buy day for the session following a downside breakout, especially if the daily trend is up. For a TTT Buy day we expect to see early session weakness and have the market put in a bottom and rally over the course of the session. For a Buy day, then, we look to identify when the rally begins, go long when we believe the market is moving higher, and then hold longs as long as the market trends higher.
Last night’s session displayed the first part of a TTT Buy day- Jan soybeans traded below Monday’s low of 1021-6 and then rallied, making an overnight high of 1031-0. For the day session we could look to go long if the market made another test of Monday’s low (another TTT Buy day pattern) or we could buy if it rallied above the overnight high (which would serve as evidence the rally was continuing).
The day session open was 1028-0, made a small rally before making a day session low of 1024-2. From here it resumed the rally, moving back above 1031-0 from 8:45 AM to 9:05, when it began to rally in earnest. We would look to go long in here, with the initial stop loss below the 1024-2 low. It rallied for the of the morning, making a blowoff top after it cleared the 30 Oct. high of 1059-2.
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