Although the March E-mini Russell 2000 Index is trading higher shortly before the opening, it is in catch-up mode as the Dow and the S&P 500 have taken over the leadership. While earlier in the year, the interest may have been in the small-cap stocks, investors are now allocating more money to large cap equities.
The index is in a strong position to rally today as the nearest resistance level is 924.20. A breakout over this level could trigger an even further rally to 928.70.
On the downside, the index is trading on the bullish side of a retracement zone at 917.70 to 912.90. This area is now new support. The strength and direction of the rally is being provided by an uptrending Gann angle at 912.60.
Overnight, the main trend turned up when the March E-mini Russell 2000 Index crossed the February 25 top at 920.50. The new main bottom is 892.60.
Demand for higher risk assets and the momentum created by the large-cap indices is likely to be the main catalyst behind today’s move.