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Home / Futures Blog / A Second Chance Sale in the eMini S&P Futures Today

A Second Chance Sale in the eMini S&P Futures Today

November 12, 2015 by Scott Hoffman

When a market has a session with a strong directional move higher or lower, the following session usually has a move in the opposite direction (a Taylor Trading Technique cycle day) otherwise residual momentum will continue the breakout move on the second day. Either pattern can be a trade opportunity.

In last night’s Swing Trader’s Insight the comment for the eMini S&P futures was “cover breakout sales, Taylor Trading Technique Buy day”. The Taylor Trading Technique is not a sure thing for the session after a breakout move (really, nothing is a sure thing in trading); the following day’s action depends on whether or not the breakout move expends it momentum in the first session.

ESZ daily Nov 12

For a Taylor Trading Buy day we anticipate an upside reversal however we only go long when we have evidence that the market is heading higher. After last night’s action it was evident that the downside momentum was still in control; we would look for signals that the downside move was continuing or potentially the upside reversal of a TTT Buy day.

I was looking at the short side because overnight the market made a solid move below the recent low, the 2062.00 low from Monday.  It was below this level; if it served as resistance on a recovery rally then a resumption of the selloff was likely so we should look for a short sale opportunity.

We didn’t have anything to do at the 8:30 AM open and I wasn’t sure we’d get a trade opportunity today. The 8:30 open was around 2058 and it spent roughly the first hour in a trading range. Just before 10 AM it moved out of the top end of that range, moving above 2062.00 around 10 AM.

ESZ intraday Nov 12

At this point we would watch to see if it was able to rally above 2062.  A sustained rally above there would suggest we could start to look for signal to go long, while a move back below there would suggest the bears were still in charge, and give us a short sale opportunity.

By about 10:10 the rally had failed and we could look to go short. We would place the initial stop loss above the recent swing high (2063.50); if the market rallied back above this level it would indicate the selloff had most likely ended.

The down move gained steam over the morning. The day session low (2053.25) initially held up the market around 10:45; when it was broken around 15 minutes later a move to the session low of 2049.00 quickly followed.

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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