It feels like feast or famine for trading recently- I had a difficult time finding trades yesterday, and today a large number of markets have a tradable setup. That’s actually not what I would expect; it’s a result of how the markets are behaving as a result of the Trump administration. I wrote a report about these new market dynamics; you can get a copy of that report HERE.
The eMini S&P futures were one of the markets with a good trading setup today. Monday’s small range (NR4 day) and directionless trade (doji bar) gave it a breakout setup for Tuesday. This meant we would look for a strong move in one direction, with an initial move beyond close in resistance or support to serve as a trigger for a trade entry.
Stocks were slightly lower for much of the night as risk aversion was the theme. In this morning’s watch list for Swing Trader’s Insight, my comment for the eMini S&P was to look for a potential breakout trade for the day session, with the Monday and overnight low of 2347.50 as the primary downside breakout level.
The 8:30 AM open was 2349.00 and the market dove to a new session low of 2346.75 in the first minute of trade. You could have used this first move to get short, although I prefer to let the market get past the “opening range” (the first 5 to 10 minutes of trade) before taking a trade.
If you didn’t short the first break, you got a second chance at 8:40 when the Monday low was broken a second time. The initial stop loss could go above the day session high of 2351.75, which was also the last premarket high was 2351.75.
The market initially broke to a new low of 2340.75, came back up to test resistance at the Monday low, then legged down to a session low of 2333.25 just before 10 AM. If you wanted to stay short, I would use the most recent high of 2340.00 as a resistance level. If you took profits, I would look for new shorts for the time being – maybe if it broke below the day session low.
Essential Guide for Futures Swing Trading
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