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Home / Futures Blog / June 29 –Selling a Top in the eMini S&P Futures

June 29 –Selling a Top in the eMini S&P Futures

June 29, 2017 by Scott Hoffman

By the Taylor Trading Technique, today was a Taylor Trading Technique Sell day for the eMini S&P Futures. Normally this would mean we would look for a two sided trade around the previous day high, with a Sell Short day to come in the following session. In this case, however, there were some patterns that made a short sale a likely opportunity today (a day early).

Wednesday was a Taylor Trading Buy day. The market opened near the Tuesday low, made a new low for the move (nearly the lowest low in June) and then rallied strongly, closing near the high of the session, with the widest trading range of the previous seven sessions (a WR7 day).

The WR7, high range close, and the high in ROC made it more likely that Wednesday’s rally exhausted the upside momentum, which is what we would normally anticipate for a TTT Sell Short day. For this reason, in this morning’s Swing Trader’s Insight Morning Watch List I suggested we look to short the eMini S&P if it showed weakness this morning.

My morning comment today was to short the eMini if it broke below the overnight low; this would be a signal that downside momentum was picking up. As with any Taylor Trading signal, we anticipate moves however we don’t act on them until we have confirmation that the market is actually doing what we anticipated.

So for the September eMini S&P we would look to short the market if it broke below the overnight low of 2438.25 (At the time I wrote the morning note the low was 2439.00; after the lower low was made, we used that.)

The day session opened at 2440.00, traded to the Wednesday high, And then quickly dropped below the overnight low, triggering our short sale. After we got short we could place stop loss orders either above the day session high (2440.50) or the overnight high (2445.00).

A good selloff ensued from here. I had a first target of 2429.38; a 50% retracement of the move from the Wednesday low to the Tuesday high. I use these 50% levels as a pivot point to gauge market moves- if it holds we anticipate the market will work back to the recent extreme (would be the high in this case). If it takes out the 50% level we look to move back to where the move started.

Today the 50% rule worked; 2429.38 was broken and the market worked its way down to the objective of 2413.75, the Wednesday low. From here you could cover shorts as an objective was met or you could look to stay short, looking to see if the market breaks below the Wednesday low. Today’s selloff will likely mean we will anticipate a Taylor Trading Buy day for Friday.

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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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Risk Disclosure

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.

Filed Under: Swing Trader's Insight

About Scott Hoffman

Scott graduated from the University of Chicago in 1986 with a degree in Economics. After graduation, Scott worked on the floor of the Chicago Mercantile Exchange then moved upstairs, serving as the personal broker to a former chairman of the Chicago Board of Trade. There, he worked as a broker and margin manager, starting up the firm’s full service brokerage division.

Today, Scott serves as an educator and mentor for new traders, and as a trading partner and ally for experienced traders. The breadth and depth of Scott’s knowledge make him the “go to guy” for both retail and institutional traders.

Scott also publishes two futures advisories, Swing Trader’s Insight and Trade or Fade. He also writes the futures trading blog at www.futuresinsightblog.com. Scott has written articles for a number of futures publications and has done numerous futures trading seminars, including seminars for both the CBOT and CME.

Scott offers his customers the knowledge he has gained from his more than 25 years of experience in the futures business. Scott is accepting new clients at this time.

Scott lives in suburban Chicago with his wife and three children. In his free time he enjoys coaching his children’s sports and various other athletic activities.

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Risk Disclosure

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.

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