In this morning’s comment for Swing Trader’s Insight I wrote that I would look to short the November soybean futures if they broke the Thursday low. I try to get the morning comment out as early as possible. For this reason I don’t provide a lot of detail there; I thought I’d explain the setup now.
After yesterday’s USDA report, soybeans traded on both sides of unchanged, closing with a doji. Given the down trend (and a report that was construed as bearish), bearish momentum was likely to reassert itself if the market started moving lower. Additionally, ROC had risen to a 4 day high, giving a sell signal.
I used the Thursday low as an entry level – if the market broke below there it would signal the downside momentum was reasserting itself. The overnight session closed above that price so we could watch for a break after the day session open.
The 8:30 AM open was 840-2; the market promptly sold off from there. The market broke below our entry, rose back above it once and then sold off decisively. By just before 9 AM it dropped to a session low of 826-6 and then worked its way back higher.
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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