The June E-mini Russell 2000 Index is trading better this morning. Positive action in Cyprus regarding the proposed levy on bank deposits has helped calm a market which earlier in the week saw a tremendous break. The decision to reject the proposal is driving up demand for higher-risk assets.
Today the Fed will release its policy statement. Investors expect the central bank to hold steady on interest rates and stimulus program. Investors will be looking at the language of the statement for any clues regarding the slowing down of asset purchases or the early exit from the program.
Fed Chairman Bernanke will also be holding a press conference today. Investors will be listening to the tone of his answers. He is expected to be grilled on whether the strengthening economy is pushing the Fed closer to slowing down or ending its asset buyback program. If he confirms a slowdown is possible or the exit is near then the market may weaken late in the session.
Technically, key support is at 931.60. Based on the short-term range of 951.00 to 931.60, a retracement zone at 941.30 to 943.60 has become a key pivot area. Holding above this zone is bullish for the market. A break below it will be a sign that the rally is failing.