In this morning’s Swing Trader’s Insight watch list, I commented on the eMini NASDAQ futures that we should look to buy a move above 5660.50, the Monday high. This gave us a good trade this morning; here’s how it went.
I was more interested in the NQ than the ES today. The ES had a Taylor Trading Buy day signal for today however it was trading in the lower middle of Monday’s range; it would take a pretty large selloff for a low violation buy signal and there wasn’t an obvious price to look for an upside breakout.
In contrast, the eMini NASDAQ futures had a doji bar on Monday and it showed some range contraction from Friday. ROC (the bottom panel of the daily chart) was down at a buy signal level, and Monday’s close near the top of the range meant it wouldn’t take a big move to push above the Monday high, the standard reference price for an upside breakout.
The NQ rallied as we moved into morning in the US. It took out the Monday high just before 7 AM, making a session high of 5664.75 just before the 8:30 AM open. As I normally suggest, I didn’t take the preopen trading, preferring to wait for the stock market open.
As is often the case (which is one reason I wait for the 8:30 open), 8:30 open was above the 5660.50 reference price. It made an initial move below the Monday high; the subsequent move back above that level was our buy signal. If you wanted a more conservative you could wait for a move above the premarket high to go long.
The breakout led to a strong morning rally, which made a high around 9:05. Ten minutes later it made a new session high but was unable to hold trade above the previous high, and the market retraced lower for the balance of the morning.
Essential Guide for Futures Swing Trading
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