By the Taylor Trading Technique today was a Sell Short day for the eMini S&P futures. This signal allowed us to anticipate a trade opportunity this morning.
For last night’s comment Swing Trader’s Insight I noted the (TTT) Sell Short day for the ES. This week was especially clear for the TTT cycle, although Thursday’s high level of the ROC gave more confidence in the Sell Short day signal.
Normally for a Sell Short day we watch the previous day high (in this case, 2369.25 basis ESM) as the reference price. In the Morning watch List for STI I suggested we watch 2374.50 as a pivot point. This meant after the 8:30 AM open we could look to sell a failed rally above there as a Sell Short day setup or we could look for a lower level entry if it remained below.
The market did push above 2374.50 in the pre-open; if you trade it you could have used that for an early morning entry. I choose to wait for 8:30 so although I didn’t take this signal, the failed rally gave confidence to look for a short in the morning.
The 8:30 open was 2373.50 and 10 minutes later it dropped to give the first sell signal. If you took the first short you could place your initial stop either above the day session high of 2374.00 or the session high of 2376.00. When the two are this close I will usually go with the wider stop however in this case it didn’t matter, as it make a double top at 2374.00 about 20 minutes later.
The market moved decisively lower from there, moving lower in a characteristic “3 pushes” pattern to the session low of 2359.00. This low held and the market recovered in the afternoon.
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.