Daily March E-mini Russell 2000 Index

E-mini Russell 2000 Index (TF) Futures Analysis – February 1, 2013

Following a minor reversal to the upside on Thursday, the March E-mini Russell 2000 index followed through to the upside in overnight trading, putting it in a position to challenge the high of the week at 907.40. A trade through this level will make 891.10 a new swing bottom. Once this is formed, a trade back through it will turn the main trend to down on the daily chart.

The Russell 2000 also crossed over to the bullish side of a downtrending Gann angle from the 907.40 top at 895.40 today. This is a sign of renewed strength although the index will have to take out 907.40 to confirm the move.

The key angle which has to be overcome is the long-term uptrending Gann angle at 911.10. Regaining this angle will put the market in an extremely strong position.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

On the downside, a better than expected Non-Farm Payrolls number will move the Fed closer to ending its quantitative easing program. This will create some uncertainty for traders who would then have to factor in the possibility of higher interest rates sooner than expected. The next potential downside target is an uptrending Gann angle at 867.10. This is followed by a retracement zone at 865.30 to 855.30.

In breaking news, U.S. reported that 157,000 jobs were added in January. This is below the consensus guess of 165,000. The unemployment rate also inched higher to 7.9%. Both of these numbers means the Fed is unlikely to alter its monetary policy or provide any reason for investors to believe that the economic recovery is gaining steam.

The trading action is mixed since investors aren’t sure whether to take the market higher because interest rates will remain low or sell the index because the economy is still weak. 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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