E-mini Russell 2000 Index (TF) Futures Technical Analysis – August 12, 2015 Forecast

September E-mini Russell 2000 Index futures broke sharply during the pre-market session, giving the market a downside bias shortly ahead of the cash market session. The catalyst behind the selling pressure was another devaluation of the Yuan by the People’s Bank of China.

The pre-market sell-off took out last week’s low at 1196.30, making 1221.20 a new minor top.

Based on the current price at 1196.10, the first resistance angle comes in at 1198.20. The next resistance angle at 1210.80 stopped the market earlier in the pre-market session.

The direction of the market today is likely to be determined by trader reaction to the angle at 1198.20. A sustained move under this angle will signal the presence of sellers. This could create enough downside momentum to trigger an eventual break into a steep downtrending angle at 1178.80. Crossing to the weak side of this angle will put the index in an extremely weak position.

Overtaking 1198.20 will indicate that buyers are coming in to defend the index against a steep decline. The next angle at 1210.80 is not only resistance, but also a potential trigger point for an acceleration to the upside with 1221.20 the next target, followed by another downtrending angle at 1226.80.

Watch the price action and order flow at 1198.20. This will tell us whether the bulls or the bears are in control today.