Coffee futures had a Taylor Trading Buy day signal today and the longer term trend is up. A gap lower open today was a good signal to look for an opportunity to go long IF the market rallied.
I didn’t see many trade setups in the financial markets for this morning’s watch list for Swing Trader’s Insight. There were some signals that had worked- Taylor Trading Sell Short day signals in the stock indices and a Buy day for gold futures- however the trades for these signals occurred last night. Given the volatility and range of these moves I was cautious about trading these markets today; you could easily be stopped out only to have the market go your way in the end.
Because of this, I looked for trade opportunities in markets that were less likely to see a big move because of the election. Crude oil was a candidate, looking for a trade after the 9:30 AM inventory report (there was a good rally after the release), and grains after the 11 AM USDA report (soybeans and soymeal were on Taylor Trading Sell Short days.)
Again , coffee futures were on a Taylor Trading Buy day signal and the longer term trend is up. This combination was a good reason to look for an opportunity to buy. The session’s gap lower open gave another reason to look to buy- IF it rallied it would put pressure on new shorts to cover, adding to a rally.
The previous day low is the standard reference price for a Taylor Trading Buy day so today’s reference price for December coffee was 167.25. If the market opens above the previous day low, a TTT Buy day looks for a move below the reference price and then we buy when the market rallies back above the previous day low. When the Buy day open is below the previous day low we look to buy when the market trades above that level.
We got the buy signal around 8:35 AM when the Monday low was exceeded. The initial stop loss could go under the area of the 8:30 low, around 166.00. A first profit target was the Fibonacci retracement level at 169.60.
Essential Guide for Futures Swing Trading
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