The grain futures are often good markets to trade using the Taylor Trading Technique methods I use for the Swing Trader’s Insight advisory. Today there was a good setup in the soybean futures.
A basic principle of the Taylor Trading Technique is of action and reaction- that a move I one direction today is likely to result in a move in the opposite direction. That’s especially the case in a session after a market has made a breakout move.
Dec. e Mini S&P Futures: It’s a Taylor Trading Technique Sell Short day. 1961.25 is the SS day reference price; 1950.75 is the first downside target (100 day SMA) and 1943.00 is next.
Today’s traders have come to realize that online trading revolves around two crucial issues – execution and analysis.
In this morning’s Swing Trader’s Insight Watch List, one of the setups I pointed out was the breakout setup in the lean hog futures (read the watch list HERE). I like to trade markets that still have decent pit volume or otherwise seem to get going later in the morning (stock indices, grains, livestock) as they often give trade opportunities at “reasonable” hours (i.e., not 3 AM); today’s hog trade was a good example.
The eMini S&P was on the Sell day of the TTT cycle for today. Monday was the Buy day of the cycle, and the rally off early morning lows was the result. In addition, the fact that it was the first day of a two day FOMC meeting made a two sided trade more likely, as traders would be less likely to want to commit to new positions with heightened expectations for increased volatility and uncertain direction after the meeting.
Sept. eMini S&P Futures: It’s a “cover breakout sales” day so a Taylor Trading Technique Buy day is anticipated. Friday’s low of 1968.00 is the Buy day reference price; there was a low violation buy overnight. For the day session I’d look for another test of Friday’s low or a rally above resistance- for now that’s 1972.00 and then the overnight high of 1973.25. The 1976 area is the first rally target.
Sept. eMini S&P Futures: Breakout setup (NR7, doji). Watch the overnight low (1975.50) and high (1980.75) as the first breakout reference prices. Trade or Fade (my breakout trade advisory) has breakout levels at 1972.81 down and 1984.69 up.
Sept. eMini Russell Futures: Breakout setup (NR7); use Wednesday’s high and low as reference prices.
Sept. eMini S&P Futures: It’s an “exit breakout buys” day; this suggests we should look for a Taylor Trading Technique Sell Short day. Monday’s high of 1980.50 is the reference price for that trade. Monday’s close was far enough below the high that I would be cautious with shorts- only sell when you see downside momentum.