E-mini Russell 2000 Index (TF) Futures Technical Analysis – June 14, 2016 Forecast

June E-mini Russell 2000 index futures finished lower on Monday as investors looked ahead to the week’s scheduled Fed meeting and the upcoming U.K. vote on whether to leave the European Union. We’ll also be rolling over to the September contract on Wednesday.

The latest Brexit poll, released midday ET Monday by The Guardian, rattled the markets when it revealed a gain in the “leave” camp over the “remain”. With the probability of them leaving slowly increasing, implied volatility has been jumping. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked above 21 for the first time since February 25.

Technically, the main trend is up according to the daily swing chart. However, momentum has been down since the 1190.30 main top on June 8. The minor trend or 1-day swing chart turned down on a trade through 1153.40.

The main range is 1082.70 to 1190.30. Its retracement zone at 1136.50 to 1123.80 is the primary downside target. Since the trend is up, we may see buyers show up on a test of this zone since they will consider it a value area.

Based on Monday’s close at 1149.30, the direction of the market today is likely to be determined by trader reaction to the long-term uptrending angle at 1150.70.

A sustained move under 1150.70 will indicate the presence of sellers. This could lead to an acceleration to the downside into the main 50% level at 1136.50. Watch for a technical bounce on the first test of this level. If it fails then the index will enter the retracement zone with the Fib level at 1123.80 the next target, followed closely by the uptrending angle at 1116.70.

Overcoming and sustaining a rally over 1150.70 will signal the presence of buyers. This could drive the market into the steep downtrending angle at 1158.30. This angle has provided resistance for three days so we could see sellers on the first test. However, if it is taken out with conviction, the rally could extend into the next downtrending angle at 1174.30.

Watch the price action and read the order flow at 1150.70 all session. Trader reaction to this angle will set the tone and direction of the market today.