Like the other major indices, the March E-mini Russell 2000 Index appears to be ready to roll over to the downside. Traders seem to be waiting for a catalyst to trigger profit-taking and renewed selling pressure. There are no major economic reports today, but on Wednesday, the U.S. releases its retail sales report. This report could trigger the start of a near-term sell-off if it fails to meet expectations.
The current sideways action suggests impending volatility. The first downside target is an uptrending Gann angle at 932.60. This angle is controlling the strength and direction of the market. A break through this angle should trigger the start of a near-term break.
Based on the short-term range of 892.60 to 943.00, the first major downside target is the 50 to 61.8 percent retracement zone at 917.80 to 911.80. Although this is the potential downside target, it is still too risky to go against the trend while trying to pick a top. The best topping signal to watch for is a closing price reversal top. Keep an eye out for this formation on the hourly or daily chart.
