In last night’s edition of Swing Trader’s Insight, the eMini S&P futures were labeled as a breakout setup, due to the inside day range contraction (Tuesday range was 60% of Monday) and doji bar. As it turned out, this breakout setup yielded two trades if you were looking for a trade this afternoon.
(chart by Futuresource)
The first trade came early in the day session. Following the strong ADP employment report, the day session opened at 2363.00, and traded to 2364.50 in the first few minutes. After a pause, this early high was taken out about 10 minutes later (an “opening range breakout” trade). This breakout took the market to the session high of 2375.00.
(chart by Futuresource)
This could have been enough for the day. However, if you wanted to look for another trade, the 1 PM CT release of the minutes of the last FOMC meeting were a potential catalyst for another move in the afternoon. (If you wanted to guess at a direction, the lower intraday double top after Noon was a potential bearish signal.)
The 1 PM release caused an initial move lower, as the Fed discussed winding down its huge balance sheet of Treasury holdings which would put upward pressure on interest rates. If you wanted an early entry, a break of the 2369.25 post release low was a first point to consider.
If you were looking for a later entry, a break below the opening range high (2364.50) or the Tuesday high (2358.75) were good candidates for short entries, as these were levels where day session longs or overnight longs respectively, were now under water. The afternoon selloff turned into a rout, continuing into the aftermarket close.
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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