In today’s Swing Trader’s Insight I noted the eMini S&P futures are on the Sell day of the Taylor Trading Technique cycle. This effectively gave us a buy signal for this morning.
Thursday was the Buy day of the TTT cycle, although it didn’t look like one. (On a textbook TTT Buy day the market opens near the low of the daily range and rallies to close near the top.) I’ve learned over the years that even when markets don’t do what the TTT on a given day, it’s worthwhile to follow the TTT cycle roadmap for the following session.
This meant eMinis had a Taylor Trading Sell day for today. For a Sell day we anticipate a market rally to reach the high of the previous session (where Taylor’s “smart money” traders would sell out the long positions they acquired on the Buy day.)
Because today was a Sell day, this morning’s low price (in relation to yesterday’s high) was a potential buying opportunity. However, that’s all it was – a potential opportunity- until we have confirmation the market is moving in the anticipated direction.
In the morning Swing Trader’s Insight watch list I noted 2046.50 as support and 2053.00 (overnight low that was broken post- NFP) as resistance. Starting at the 8:30 AM open we could look to go long either on a test of support or a rally above the resistance level. The first (and primary) objective for the trade would be Thursday’s day session high of 2076.50. (You can use either day or the combined Globex session highs and lows for reference prices, depending on which makes more sense.)
After making a session low just past 8 AM the market began to rally. By 8:30 it was up to the 2053.00; giving us our buy signal just after the open. Our initial stop loss went below the session low of 2046.75. It rallied as the morning went on (taking out the overnight session high of 2062.75 was an additional buy signal).
Our 2076.50 objective was hit just before 10 AM CT. There are occasions when it makes sense to flexible about price objectives; this was time it made sense to stick to taking our profit when the objective was reached. Most of the time I stick with objectives on a Sell day as the market has often already made a large move off a low; that was the case with this trade as the objective was a 36 point move off yesterday’s low, a move of 1.7%.
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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