E-mini Russell 2000 Index (TF) Futures Technical Analysis – June 17, 2014 Forecast

The September E-mini Russell 2000 Index thrust to the upside in the pre-market session before settling into a range. Because of the low volume, it’s hard to tell if the move was because of the thin trading conditions, or a bona fide attempt to breakout to the upside.

The main range is 1175.40 to 1147.20. The retracement zone formed by this range is 1161.30 to 1164.75. The overnight move to 1167.20 crossed to the bullish side of this range before settling back into it. This zone is critical to the structure of the market since the index will either stop here and form a potentially bearish secondary lower top, or take it out with a vengeance on the way to a test of 1175.40.

Watch the order flow in this zone if you can. If the time and sales indictor is red, the sellers are gaining control. If it’s green, the buyers are in better shape.

The first downtrending angle comes in at 1163.40 today. The index rallied through this angle under light trading conditions before settling back under it. Weak buy stops may have been triggered by the move. Sustaining a rally over this angle could mean a test of the next angle at 1169.40. This is the last major angle before the June 9 top at 1175.40.

During the pre-market session, the market also crossed to the bullish side of an uptrending angle at 1163.20. This angle actually forms a possible support cluster with the downtrending angle at 1163.40. The daily chart indicates a sustained move under this angle could trigger a steep decline since the next support angle comes in at 1155.20, followed by 1151.50.

The tone of the market today is likely to be determined by how investors react to the angle cluster at 1163.20 to 1163.40. A sustained move under 1163.20 will set a bearish tone while taking out 1163.40 with conviction will be bullish.