On many occasions, the first Friday of the month is a good day for trade setups, especially breakouts, as the significance of the labor market causes traders to stay out of trades before the release, which in turn causes a sudden jump in trading interest and concurrent large directional moves afterward. This week, however, saw enough other news- the GOP tax plan, Trump’s candidate for Fed Chairman, and quarterly earnings reports- meant a lot of the big moves for the week were already made by Friday.
As a result I didn’t see many notable trade setups this morning. The EMini S&P was on a Taylor Trading Sell day so we could look to buy a break (or sell a rally if it came first) but I didn’t see a precise setup for it. T Bonds had a Taylor Trading Sell Short day, but that move came before I was writing this morning’s Swing Trader’s Insight watch list. Other markets didn’t show any setups or were not moving as I expected, meaning I wouldn’t be trading them.
I was disappointed in the paucity of breakout setups today, as I have just finished a report on identifying and trading them. After the stock market open I went back through last night’s Swing Trader’s Insight to look at the grains and livestock after their open. In doing that I was reminded of silver, the only futures market I had listed as a breakout trade candidate for today. It hadn’t yet broken out, so it was a market to continue to watch.
Silver futures had a breakout setup for Friday, as Thursday was an NR7 day and a doji bar. The chart was especially interesting as Thursday’s breakout setup came after the big rally on Wednesday. If a breakout move got started today, it could result in a big move if the rally resumed or if traders decided to sell to take profits. Additionally, Thursday’s low of 17.05 was a 50% retracement of the October selloff, making it a potentially significant pivot point.
Following roughly sideways trade for most of the morning, silver (and gold as well) began to sell off around 9:10 AM. This decline accelerated and by the time it broke below the Thursday low (our trigger price for a short sale) it was a rout, dropping to a session low of 16.77 by 10 AM.
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.
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.
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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 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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