By the time I was writing this morning’s Watch List for Swing Trader’s Insight, a number of markets had already made moves that had been anticipated. That meant we had to look for continuation or reversal type moves.
The Treasury Bond market was on the Sell Short day of the Taylor Trading cycle. This meant we anticipated Bonds would have a failed rally against the previous day high. The failed rally would turn into a larger selloff as the market moved lower over the course of the session.
For the March T Bonds, the Sell Short day reference price was the Tuesday high of 153-00. It did make the failed rally sell signal however this signal occurred early last night and the market was much lower by this morning. With the longer term trend down, we could look to establish new or additional shorts if we had confirmation the market appeared to be ready to make a bigger selloff.
I looked for that second short entry setup so we could short if we got our confirmation. I suggested 151-24, which was the Tuesday low as well as near the Fibonacci retracement support level at 151-21.
We got the short entry trigger around 7:15 AM as the ADP employment figures were released. The market quickly sold off, making a session low of 150-04 about an hour later. This was a test of the recent low of 150-08; how the market reacted to this level would tell us whether to stay shorts or cover.
The first move below 150-08 yielded a decent bounce. The 150-08 level was te3sted again, around 10:20. This time, not only did the previous low hold, the market also made a higher intraday low, which turned into a bigger rally.
Essential Guide for Futures Swing Trading
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