E-mini Russell 2000

E-mini Russell 2000 Index (TF) Futures Analysis – January 18, 2013

The March E-mini Russell 2000 futures contract surged to a new high on Thursday without much fanfare. This may be a sign of a tired market. Overnight there was no follow-through to the upside which leads one to believe that the rally may have been option-expiration related.

Near-term support is at 875.10. A break through this level will put a bearish spin on the index. From a weekly standpoint, a close under 878.10 will send out a bearish signal.

E-mini Russell 2000
E-mini Russell 2000

The inability to follow-through to the upside and the general sluggishness of the overnight trading action suggests an overbought market. Although this appears to be evident, the absence of a clear bearish signal is helping to maintain the upside bias.

Although the U.S. debt ceiling issue is a major concern, investors aren’t expressing the feeling of doom and gloom that they showed last month when the U.S. was debating the fiscal cliff. This feeling of complacency could turn around and bite traders next week, it there are signs that the debt issue is at an impasse. Until then enjoy the uptrend as long as the market continues to make higher tops and higher bottoms. 

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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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