Today was a Taylor Trading Technique Buy day for the eMini S&P futures. The move took much of the session to get going but late developing moves are often strong as they squeeze out weak hands.
The eMini S&P futures were down sharply overnight, trading well below the standard reference price of the previous session low. The Taylor Trading Technique normally uses this as a reference price, looking for a selloff below and a subsequent rally back above that level to serve as our trigger to go long.
In this case we were still looking for an end to the selloff with a lower level to serve as out reference price. In the morning Swing Trader’s Insight watch list I suggested we watch the overnight low at 1990.00; the overnight low often serves as the reference price for the day session, especially on Sunday nights, when the markets are largely driven by overseas action.
Today the US stock market open did not prove to be the catalyst for a bottom in stocks, as it fell through the first hours of trading. As it pushed below the overnight low it moved toward the last major low of 1983.25 from 14 December. (see the intraday chart below.)
The 14 December low proved to be a good reference price- if it held, we could look for the anticipated TTT Buy day rally; if it fell below we would wait for a reversal. By a little after 10 AM the market made a successful test of our reference price level, giving us our TTT buy signal.
It rallied into the early morning, finding resistance around the overnight low. This pushed the market back down but a late afternoon selloff made a higher low and the subsequent move higher brought on more aggressive buying. As is often the case, a late session rally is often especially strong and doesn’t show much retracement as buyers have little time to do what they need to do.
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.
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.