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.
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