E-mini Russell 2000 Index (TF) Futures Technical Analysis – June 17, 2016 Forecast

The September E-mini Russell 2000 Index futures contract formed a potentially bullish closing price reversal bottom on Thursday. This chart pattern formed one day earlier than expected. It was confirmed during the premarket session, but there wasn’t much of a follow-through to the upside. The size of the buying volume is going to dictate whether this chart represents actual buying or just short-covering due to oversold conditions.

The main trend is up according to the daily swing chart.

The main range is 1080.60 to 1185.10. Its retracement zone is 1133.00 to 1120.50. This zone was the primary downside target and it provided support on Thursday when the index spiked down to 1127.10.

The short-term range is 1185.10 to 1127.10. Its retracement zone at 1156.10 to 1163.00 is the primary upside target. If the trend is preparing to turn down then sellers will come in on a test of the zone. Bearish traders are going to try to produce a secondary lower top. Bullish traders are going to try to take out the zone in an effort to make 1127.10 a secondary higher bottom.

Trader reaction to the short-term retracement zone is going to dictate the longer-term direction of the market.

Based on Thursday’s close at 1145.00, the direction of the market today is likely to be determined by trader reaction to 1145.70.

A sustained move over 1145.70 will indicate the presence of buyers. This could create enough upside momentum to challenge a resistance cluster at 1156.10 to 1157.10.

Overtaking 1160.60 will put the index in a strong position, but don’t expect an acceleration to the upside unless 1163.00 is taken out with conviction. This Fib level is the trigger point for a possible surge into 1171.10.

A sustained move under 1145.70 will signal the presence of sellers. This could generate enough downside momentum to challenge 1137.75. This is followed by the main 50% level at 1133.00.

Crossing to the weak side of a steep downtrending angle at 1129.10 will put the market in a bearish position. This should lead to a fast move into yesterday’s low at 1127.10.

Taking out 1127.10 will negate the reversal bottom, setting up the index for a break into a support cluster at 1120.70 to 1120.60.

Look for an acceleration to the downside if 1120.60 is taken out.

Watch the price action and read the order flow at 1145.70 all day. Trader reaction to this level will tell us if the buying is getting stronger, or if sellers are regaining control.