A sharp sell-off in the Euro overnight is driving investors out of higher-yielding assets. This is putting pressure on the large-cap stock indices and the small-cap March E-mini Russell 2000 index.
For weeks the index has been trending higher, but the rate of the ascent has left investors concerned. Volume has been low and volatility has been dropping, creating a feeling of complacency. This action is typically a precursor to renewed volatility. The overnight action seems to have caught analysts by surprise so investors may overreact to the downside today.
Technically, the key price level to watch is 911.10. This price was created by a slow-moving angle from the 891.10 bottom on January 31. A break through this level is likely to mean a test of a retracement zone at 905.80 and 902.35.
The main trend is up and will remain up until the swing bottom at 891.10 is violated. If this occurs then traders should look for a possible acceleration to the downside.