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

June E-mini Russell 2000 Index futures posted a potentially bullish closing price reversal bottom on Friday. The move occurred one day earlier than expected. If confirmed by a trade through 1114.90, we could see a 2 to 3 rally equal to 50% – 61.8% of the last break.

The main trend is down according to the daily swing chart. However, a shift in momentum to the upside may have occurred with the formation of the reversal bottom. A trade through 1114.90 will confirm the chart pattern and could trigger a follow-through to the upside. A break through 1097.50 will negate the chart pattern and will signal a resumption of the downtrend.

The main range is 1059.50 to 1154.40. Its retracement zone at 1107.00 to 1095.70 was the primary downside target. This zone was tested successfully on Friday, helping to produce the reversal bottom.

The short-term range is 1154.40 to 1097.50. Its retracement zone at 1126.00 to 1132.70 is the primary upside target. If traders react to the reversal signal, we should see a test of this zone within 2 to 3 days.

Based on the close at 1113.90, the direction of the market today will be determined by trader reaction to 1114.90.

A sustained move over 1114.90 will signal the presence of buyers. This could create enough upside momentum to challenge the price cluster at 1125.50, 1126.00 and 1126.40. Since the main trend is down, sellers are likely to come in on the first test of this area.

The inability to sustain a rally over 1114.90 will indicate the presence of sellers. This could lead to a pullback into the main 50% level at 1107.00 and the uptrending angle at 1104.50.

The angle at 1104.50 must hold or the market could tumble all the way to the Fib level at 1095.70 and the uptrending angle at 1094.00.

Watch the price action and read the order flow at 1114.90 today. Trader reaction to this price will tell us if the bulls are taking control.