E-mini Russell 2000 Index (TF) Futures Technical Analysis – June 25, 2014 Forecast

September E-mini Russell 2000 Index futures formed a potentially bearish closing price reversal top on Tuesday. The chart pattern will be confirmed by a move through 1166.60. This chart pattern tends to lead to a 2 to 3 day correction equal to at least 50% of the last rally.

The last rally was 1147.20 to 1189.50. The mid-point of this range is 1168.30. Yesterday’s sell-off already drove the market into this level so traders have two options: play for a retracement of the break from 1189.50 to 1166.60. This means a move back to 1178.00, or watch to see if additional selling pressure comes in.

There are two other ranges to consider for retracements. The first is 1111.50 to 1189.50. Its retracement zone is 1150.50 to 1141.30. The second is 1080.00 to 1189.50. The retracement zone formed by this range is 1134.70 to 1121.80.

On Tuesday, a pair of uptrending angles at 1179.20 and 1171.50 today were taken out. This is a sign of weakness. The market will have to overcome these angles in order to put it back in a strong position.

The nearest support angle comes in at 1163.20. If this angle is taken out with conviction then look for an eventual break into another pair of uptrending angles at 1141.50 and 1138.00.

The best downside target and potential buying area is the combination of the uptrending angle at 1141.50 and the Fibonacci level at 1141.30.

How traders react to a rally back to 1178.00 – 1179.20 should set the tone for the near-term. Trader reaction to 1168.30 will set the tone for the day.