E-mini Russell 2000 Index (TF) Futures Technical Analysis – November 5, 2015 Forecast

December E-mini Russell 2000 Index futures closed slightly lower on Wednesday while posting an inside move. The price action indicates trader indecision and impending volatility. Volume and volatility may be below average today as investors prepare for Friday’s U.S. Non-Farm Payrolls report.

The NFP report is likely to show the economy added about 179K new jobs in October. Yesterday, the ADP Non-Farm Employment Change report showed the private sector added 182K jobs. This was in line with the 183K estimate.

Today, investors will be looking at and reacting to the Preliminary Nonfarm Productivity report. It is expected to show a 0.1% gain. Preliminary Unit Labor Costs are expected to rise by 2.2%, up from the last reading of -1.4%.

Also on tap are Fed member speeches by William Dudley, Stanley Fischer and Dennis Lockhart. Traders will be looking for clues as to the timing of the next Fed rate hike.

Technically, the main trend is up according to the daily swing chart. The market closed at 1186.00, inside the contract’s retracement zone at 1180.60 to 1206.00. Trader reaction to this zone will likely determine the long-term direction of the market.

Based on the close at 1186.00, the first upside target is a pair of Gann angles at 1190.90 to 1192.00. Overtaking 1192.00 and sustaining the move will indicate the presence of buyers. This could trigger a rally into the main Fibonacci level at 1206.00 if volume is above average.

A sustained move under 1190.90 will signal the presence of sellers. The first target is a major 50% level at 1180.60. Buyers could come in to support the market at this level, triggering a technical bounce.

The 50% level at 1180.60 is also a trigger point for a steep downside breakout with the next major target a short-term uptrending angle at 1162.90.

If volume and volatility are below average today then look for the index to sit inside the 1180.60 to 1192.00 range. Look for a bullish tone to develop on a sustained move over 1192.00 and a bearish tone on a sustained move under 1180.60.