The March E-mini Russel 2000 index reached a new high overnight, leading to the call for a steady-to-higher opening. Like the other indices, the Russel l is in an uptrend. Although the index has been trending higher, the rally hasn’t been “lights out”. The steady climb is beginning to raise questions about the buying power behind the move.
Technically, the only indicator to watch is the uptrending Gann angle at 895.10. The market has held above this angle for 18 trading days. A break through this angle is likely to be the first sign of an impending correction.
Traders should pay close attention to the action around this angle since the daily chart indicates there is plenty of room to the downside. Based on the current short-term range of 823.10 to 904.90, there is the possibility of a near-term break to 864.00 – 854.40.
Watch for a higher-high, lower-close to give investors an excuse to take profits. This should trigger the break. Until there is a definitive size though, trade the trend and don’t try to pick a top.
