E-mini Russell 2000 Index (TF) Futures Technical Analysis – March 9, 2016 Forecast

The March E-mini Russell 2000 Index closed sharply lower on Tuesday. After closing on its high on Monday, the market opened lower and the selling pressure continued all session. The initial selling was a reaction to the weaker-than-expected export report from China. The sharp sell-off into the close was likely related to profit-taking ahead of next week’s key Fed meeting.

The main trend is up according to the daily swing chart. The main range is 1202.40 to 936.20. Its retracement zone is 1069.30 to 1100.70. The rally earlier in the week failed to overtake the Fib level at 1100.70, stopping at 1095.30. Tuesday’s sell-off led to a close under the 50% level at 1069.30. This is a strong indication that sentiment is shifting to the downside.

The intermediate range is 1160.00 to 936.20. Its retracement zone is 1074.50 to 1048.10. The index also closed inside this zone, giving it a downside bias.

The new short-term range is 936.20 to 1095.30. Its retracement zone at 1015.70 to 997.00 is the primary downside target.

Based on the close at 1067.50, the direction of the market today is likely to be determined by trader reaction to the main 50% level at 1069.30.

A sustained move under 1069.30 will indicate the presence of sellers. The first target is a long-term downtrending angle at 1062.40. Crossing to the weak side of this angle will put the market in a bearish position. This could trigger the start of a steep drop into the next target at 1048.10.

The daily chart opens up further under 1048.10 with the next target an uptrending angle at 1033.20.

A sustained move over 1069.30 will signal the presence of buyers, but look for a labored move because the market is going to have to claw its way over a number of previous support levels. These include an uptrending angle at 1073.20, a Fibonacci level at 1074.50, and another uptrending angle at 1088.20.

Watch the price action and read the order flow at 1069.30 today. Trader reaction to this level will tell us if the bulls or the bears are in control.

Based on the daily chart pattern, the way of least resistance is down. Any rally is likely to be choppy, and labored.