E-mini Russell 2000 Index (TF) Futures Analysis – March 28, 2013

With some of the uncertainty regarding Cyprus lifted this morning, the June E-mini Russell 2000 rallied to within striking distance of its contract high at 951.30. Although the market is anticipating relative calm in the region, this story is important and traders should watch for new developments throughout the day.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Trading volume could be light today because of tomorrow’s holiday so don’t expect too much of a breakout over 951.30. A move to this level could be labored and a breakout could fail since investors will probably refrain from chasing this market higher ahead of the long week-end.

Technically, the key support number to watch is the short-term pivot at 941.40. The market has straddled this level several times this week.  A break under it will indicate a shift in sentiment. Shortly before the opening, the market is expected to open well above this level. A failure to hold the pivot could draw the attention of short-sellers which will put the market in a position to challenge an uptrending Gann angle at 933.00. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 27, 2013

Worries about the financial stability of the Euro Zone are driving investors out of risky assets and into the safety of the U.S. Dollar. This is putting downside pressure on the June E-mini Russell 2000 Index. With a long-weekend coming up, there seems to be a downside bias developing which could keep the selling pressure on the index throughout the trading session.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

The short-term range is 931.60 to 951.30. The pivot price of this range is 941.40. Shortly before the U.S. cash market opening, the June E-mini Russell 2000 Index is trading below this pivot, giving it a downside bias. Selling pressure could mount throughout the session with 936.30 the first target. If this level goes then look for a test of 931.60.

Uptrending Gann angle support is at 931.00. This angle has provided direction since February 26. This angle is important to the long-term structure of the rally. Breaking this angle will put the market in a weak position and could trigger an acceleration down to a major retracement zone at 920.20 to 912.80. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 26, 2013

The June E-mini Russell 2000 Index is trading better overnight. A general calm in the Forex markets is helping to generate a little buying interest. Investors will continue to watch the action in the Euro to get a gauge on the situation in Cyprus.

Fundamentally, investors will be focusing on today’s S&P Case/Shiller Home Price Index, the Commerce Department’s New Home Sales report and the Conference Board’s Consumer Confidence number. Investors want to continue to see a strengthening economy.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

The S&P Case/Shiller Home Price Index is expected to show an increase of 0.9%. The New Home Sales report is forecast to show an increase to 420,000 units. Finally, the Conference Board is expected to show that consumer confidence fell from 69.6 to 68.0.

Technically, the main trend is up. The main trend turns down when 931.60 is violated. On Monday, the index reaffirmed the uptrend when it took out 951.00. The failure at 951.30 indicates a lack of buying interest.

The short-term range is 931.60 to 951.30. The pivot price of this range is 941.40. This price is controlling the near-term direction of the market. Holding above it keeps the index in a position to challenge the 951.30 high. Falling below could draw the attention of short-sellers. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 25, 2013

The June E-mini Russell 200 Index is up overnight. The move to 949.40 made 931.60 a new main bottom and put the index in a position to challenge the March 15 contract high at 951.00. A move through this level will reaffirm the uptrend.

Fundamentally, the only story of the day is the reaching of an agreement between Cyprus and the European Union. This news calmed investor fears of a financial crisis in Cyprus, driving investors in higher risk assets.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Look for thin trading conditions and volatility at times since this is a holiday week. The lack of major economic reports may keep many traders on the sidelines. Another key to watch is the follow-through rally. Investors want to see new money entering at higher levels. This would be a sign of conviction and higher markets to follow.  

New support has been established at 943.60 and 941.30. A move through these levels could trigger a further decline to 931.60. A trade through level will turn the main trend to down. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 22, 2013

The June E-mini Russell 2000 Index is trading better this morning. The market is reacting to positive developments in Cyprus overnight. This could mean that the European Central Bank and the Cypriot government are close to reaching a bailout deal. This story is likely to influence the market throughout the day.

Technically, the market is trading a little better than a pivot price at 941.30. This price represents the mid-point of the 951.00 to 931.60 short-term range.  Holding above this price and regaining the Fibonacci level at 943.60 will put the market in a strong position.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Crossing back to the weak side of 941.30 will be a sign that sentiment is shifting to the downside. A trade through 936.30 will be the first sign of weakness. A move through 931.60 will turn the minor trend to down and could trigger a break into an uptrending Gann angle at 925.00.

The main trend is still up so there is a slight bias to the upside. Momentum, however, is at a standstill. This usually means impending volatility. Conditions could be choppy throughout the day, but as we near the end of the session, if a deal isn’t reached between the ECB and Cyprus, there could be a sell-off into the close. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 21, 2013

The June E-mini Russell 2000 Index is trading better this morning. The index seems to following the major indices higher. Yesterday’s Fed policy statement continues to support the market. The Fed said that it would continue to provide liquidity to the market and that it had no plan to slow-down asset purchases nor end the program earlier than expected. This means that as soon as the market can move out of its current short-term trading range, higher prices are likely to follow.

The short-term range is 951.00 to 931.60. The pivot zone of this range is 943.60 to 941.30. As long as the market can stay above this zone, it is likely to continue its rally.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Today’s Philadelphia Fed report could move the market later in the session, but the situation in Cyprus remains the wildcard. Overnight the European Central Bank issued an ultimatum to Cyprus to accept the bailout terms or risk a cut-off of support. An outright rejection of the terms could trigger as break as investors are likely to dump risky assets.

So despite a firm tone early in the session, there is still the possibility of a reversal if certain fundamental events take place in Cyprus.  

E-mini Russell 2000 Index (TF) Futures Analysis – March 20, 2013

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.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

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. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 19, 2013

The June E-mini Russell 2000 is trading higher after posting a solid recovery following Monday’s sharp sell-off early in the trading session. The big news to watch today is the story out of Cyprus. Today, government officials are expected to vote on a newly proposed levy on bank deposits. Some investors feel that this “tax” could trigger a run on the bank or cause capital to leave the region in favor of safer currencies.

Trading conditions are quiet shortly ahead of the U.S. cash market opening, but we could see increased volatility if this becomes a news event driven day. Also on the fundamental agenda are two U.S. housing reports. Both housing starts and building permits are expected to show increases. Later in the day, the Fed starts a two-day meeting. This could be a market moving event tomorrow, depending on the language in their policy statement.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Technically, the main trend is still up. The daily chart does indicate, however, that there is plenty of room to the downside. Based on the longer-term range of 889.00 to 951.00, a wash-out to the downside could test a retracement zone at 920.00 to 912.50. I can’t emphasis enough that the upside will take care of itself if the bull market is to continue, it is the downside risk that could hurt you.

Regaining 949.00 will be a sign of strength and put the market on the path it was on prior to the breakdown on Monday.

Short-term traders should watch the action at 944.30 to 942.25. This retracement zone is likely to act like a pivot today. A sustained move under 942.25 is likely lead to additional selling pressure throughout the day.  Holding above 944.30 indicates that buyers are still propping up prices. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 18, 2013

The June E-mini Russell 2000 Index gapped lower overnight, setting up the start of a potential wash-out to a major retracement zone at 920.00 to 912.70. After the initial break, traders did gather themselves, creating a short-term low at 933.50 and setting up a possible rally into the gap at 944.00 to 945.10.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

Although the main trend is up, the market did break a major uptrending Gann angle at 945.00. This angle had provided support and direction since the market bottomed at 889.00 on February 26. Look for 945.00 to act as a pivot price today.

Trading is likely to be volatile and news driven. This could mean sudden stops and starts in either direction. Fundamentally, bearish news out of Cyprus has created uncertainty in the market and this is leading to the weak bias. Although the main trend is up on the daily chart, it looks as if investors are in the protective mode and willing to cut positions to preserve their capital. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 15, 2013

The June E-mini Russell 2000 Index reached a new high overnight at 950.30. This move keeps the uptrend intact, but shifts the focus on the possibility of a closing price reversal top. Currently, the index is in the window of time for a reversal, but the buying pressure has been relentless.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

With a trend of this magnitude, investors cannot stop thinking about protecting the downside since markets tend to go down faster than they go up. Besides the closing price reversal top, traders should also watch uptrending Gann angle support at 941.00. This angle has provided both strength and direction since the bottom at 889.00 on February 26. Breaking this angle could trigger the start of an acceleration to the downside.

Unless the market starts to show signs of forming a top, it doesn’t make sense to try to pick a top. If you feel the need to be aggressive then wait for something potentially bearish to show up on the intraday charts. Like the daily chart, a closing price reversal top on the hourly chart will probably be the earliest indication that a top is forming. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 14, 2013

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.

Daily June E-mini Russell 2000 Index
Daily June E-mini Russell 2000 Index

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. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 13, 2013

Overnight the March E-mini Russell 2000 Index traded higher to 943.10 but failed to follow-through, leading to a sell-off. This pattern may play all day especially since the U.S. retail sales report came out better than expected and the index hardly moved. Both of these patterns indicate that the market may be overbought and out of buyers.

Since the market posted a higher-high on the daily chart, a lower close today will mean a closing price reversal top has formed. If it is confirmed on Thursday then look for a 2 to 3 day break. Based on the short-term range of 892.60 to 943.10, the market may correct all the way back to 917.90 to 911.90.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

Last week’s close at 941.50 could also become significant the rest of this week, because a close under this price on Friday will reverse the week to down. This could trigger the start of a 2 to 3 week break.

On the daily chart today, a major Gann angle moves up to 936.60. This angle has controlled the strength and direction of the market since it reached a bottom at 892.60 on February 26. A break through this angle today could trigger an acceleration to the downside.

There is a bullish tone today because of the strong retail sales report, however, the technical indicate an overbought market. This makes the market vulnerable to a bull trap. Those buying strength should keep the position if there is a sustained follow-through, but if it weakens, or falls back below the old top at 943.00, be prepared to exit. Aggressive traders may want to consider the short-side if the intraday charts start to show signs of a reversal.  

E-mini Russell 2000 Index (TF) Futures Analysis – March 12, 2013

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.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

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.

 

E-mini Russell 2000 Index (TF) Futures Analysis – March 11, 2013

After a strong surge on Friday following a better-than-expected U.S. jobs report, the March E-mini Russell 2000 is taking a breather this morning. The market failed to follow-through to the upside overnight which could mean fresh selling pressure from the get-go today.

Although the Russell 2000 reached a new high for the year last week, momentum has been a little sluggish because investors have shifted more funds into the large cap indices. This could mean a sharper break if the indices turn short-term bearish.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

Technically, the first downside target is an uptrending Gann angle at 928.60. If this angle fails to hold as support, then traders can expect a full retracement of the 892.60 to 943.00 range. This next downside target is 917.80 to 911.80.

Low volume could be highlighted today which could lead to exaggerated moves. Traders should brace themselves for the possibility of a choppy, two-sided trade.

 

E-mini Russell 2000 Index (TF) Futures Analysis – March 8, 2013

The March E-mini Russell 2000 Index posted a new high this morning after the U.S. government reported that the economy added 236,000 new jobs in February. This figure was well above the pre-report consensus of 160,000. Additionally, the unemployment rate fell to 7.7%.

With the main trend clearly up and nothing to stand its way, expectations are for the trend to continue throughout the session. Although the main trend is up, long traders should have an exit strategy in place just in case of a reversal to the downside. Because of the surge in prices this week, the index may be too “hot”, leading to the possibility of a profit-taking led sell-off.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

Since the index is in the “window” of time for a closing price reversal top, investors should watch the hourly chart for the first sign of selling pressure. A typical higher-high, lower-close could be the first sign that the selling is greater than the buying at current price levels.

Although this chart pattern will not mean that the trend is turning down, it could lead to the start of a sizable 2 to 3 week correction. Key support at 924.60 is a potential downside target.  

E-mini Russell 2000 Index (TF) Futures Analysis – March 7, 2013

Better-than-expected weekly jobless claims is triggering a rally in the March E-mini Russell 2000 this morning. The strong move puts the futures contract in a position to challenge the all-time high at 933.20 later in the session.

Although the weekly jobs data is the catalyst behind this morning’s move, investors may use Friday’s U.S. Non-Farm Payrolls report as an excuse to take profits later in the session. This could lead to a volatile, two-sided trading session later today. A strong short-covering rally in the Euro is also driving up demand for higher-risk assets.  

Daily March E-mini NASDAQ-100 Index
Daily March E-mini NASDAQ-100 Index

Technically, the March E-mini Russell 2000 is in an uptrend on the daily chart, but it is lagging the Dow and S&P 500 in terms of performance. This is probably related to a shift in allocation as the major players feel there is going to be a better return in the mid and large-cap equities.

Traders should continue to press the long side, but at a cautious pace. The biggest fear at this time is getting trapped at a top. Profit-taking could hit at any time. This means that investors should start watching for closing price reversal tops on both the hourly and the daily chart. This chart pattern wouldn’t necessarily mean the trend is changing to down, but it could trigger the start of near-term correction.

Technically, the main support is 920.50. Today’s upside target is the February top at 933.20. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 6, 2013

The strong pre-opening action in the March E-mini Russell 2000 has the index in a position to test the all-time high at 933.20. The index is rallying this morning on the heels of bullish jobs data from the private firm ADP. The data showed an increase of 198,000 jobs in February. This is the biggest jump in a year and could be an indication of a strong U.S. employment report on Friday.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

The fact that the Russell is lagging the other indices doesn’t necessarily mean it is weaker, it probably means that investors are shifting their funds into larger cap stocks. This allocation play typically takes place after January or February.

Later today, investors will get a chance to react to the latest Fed Beige book statistics. This could be a market mover if it shows that some regions are still struggling to gain traction. Traders may begin to pare positions late in the session ahead of Thursday’s key central bank decisions. Although most investors feel that the European Central Bank, the Bank of England and the Bank of Japan are likely to maintain their easy money policies, investors may use these meetings as an excuse to take profits.

Technically, investors should be watching for a closing price reversal top especially as it nears the all-time high at 933.20. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 5, 2013

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.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

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.  

E-mini Russell 2000 Index (TF) Futures Analysis – March 4, 2013

The March E-mini Russell 2000 Index traded lower overnight as breaking news from China pressured demand for higher risk assets. Although the initial reaction suggested the start of a hard sell-off, the market is coming back slightly ahead of the opening. Like they did last week after the Federal budget cuts looked like a done deal, investors may shed this news, instead choosing to focus on the fact that the Fed is going to continue its asset buyback program indefinitely.

Technically, the main trend is down on the daily chart. It is going to take a move through the recent top at 920.50 to turn the main trend back to up. Besides the strong comeback rally after testing 892.60, the index has also regained a pair of major long-term uptrending Gann angles at 907.10 and 906.10. This action suggests that investors are buying the dips rather than strength.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

Based on the main range of 933.20 to 892.60, a key retracement zone has been formed at 912.90 to 917.70. This morning the index is testing the lower, or 50% level at 912.90. Sustaining a move over this level should trigger a rally to the Fibonacci price at 917.70. Before it reaches this level, however, it has to break through a downtrending Gann angle at 917.20.

Since the market is testing a major retracement zone, traders should anticipate a choppy two-sided trade until the index can shed this area. 

E-mini Russell 2000 Index (TF) Futures Analysis – March 1, 2013

Large cap, mid-cap or small-cap, not amount of capitalization will be immune to the selling pressure that could hit the equity markets today. This means that growing bearish sentiment could pressure the March E-mini Russell 2000 throughout the trading session.

Weaker than expected economic data from China coupled with the possibility of a deepening recession in the Euro Zone means today is likely to be a “risk off’ trading session. Before you blame Asia and Europe for the sell-off, the across the board spending cuts by the Federal government are also contributing to the selling frenzy. Because of the uncertainty of the spending cuts, investors are paring positions rather than risk a worse than known outcome.

Daily March E-mini Russell 2000 Index
Daily March E-mini Russell 2000 Index

Technically, for a fourth time in five trading sessions, the Russell 2000 has broken through a pair of major uptrending Gann angles at 904.10 and 905.10. This is only helping to compound the problem.

The main trend is down on the daily chart and momentum appears to be building to the downside. The series of lower-tops and lower-bottoms indicates that selling pressure could take this index down to a major retracement zone at 878.20 to 865.20 over the near-term.

Look for the selling pressure to continue throughout the session but all bets are off if the Russell 2000 regains 905.10. A move through this level could turn the market higher.