Daily March E-mini Russell 2000 Index

E-mini Russell 2000 Index (TF) Futures Analysis – February 8, 2013

Since reaching a new high at 912.00 on February 1, the March E-mini Russell 2000 index has flat-lined as traders seek more guidance from earnings and the economy. The key factor affecting the market lately has been the lack of demand for higher risk assets. Equity prices have basically stabilized since the release of last week’s U.S. Non-Farm Payrolls report and the top in the EUR/USD on February 1.

Today investors will be seeking clarity from the U.S. Commerce Department December trade figures. Economists are looking for a drop of more than 6% to $45.5 billion. Weaker imports are the main reason for the narrower trade deficit. Shortly after the cash market opening, the latest data on wholesale inventories will also be released. The market is likely to react to both reports, but the news is unlikely to control the direction of today’s trading.

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

The near-term range of 891.10 to 912.00 continues to mean that the most important number to watch is the pivot price at 901.60. This pivot price along with an uptrending Gann angle at 903.10 is controlling the direction of the market.

A break through the angle will be the first sign of weakness, followed by the pivot. A sustained move under the pivot combined with increasing volume will be a sign that sentiment is shifting to the downside. The tight and narrow ranges suggest impending volatility. This means traders should brace for either a strong rally through the top at 912.00 or the swing bottom at 891.10. A move through the high reaffirms the uptrend while a break through 891.10 will turn the main trend to down. 

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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