The June E-mini Russell 2000 Index is called better this morning. The market reached a new high overnight on stronger Asian and European markets. On Wednesday the market surged after the U.S. reported better-than-expected retail sales. This bullish number reaffirmed Friday’s friendly jobs data report. Today, traders will get a chance to react to U.S. weekly jobless claims and PPI reports. Both can move the market early in the session.
Although volatility and volume have been falling, prices keep going up and the market keeps trending. It has, however, entered the window of time when closing price reversals take place. Since most long investors have sizable gains, the emphasis at this time should be on protecting the downside. This means they should be watching for a sign of a top. The first will be an intraday closing price reversal top, the second a close under a long-term uptrending Gann angle at 937.00. The best sign of a top will be a daily closing price reversal top.
The low volume and falling volatility despite new highs could be signs that investors are selling rallies. This is probably professional selling. This puts the smaller investor in a position to get caught in a bull trap. Keep watching the action on each new high to see if there is new buying or fresh selling.