E-mini Russell 2000 Index (TF) Futures Technical Analysis – October 10, 2014 Forecast

The December E-mini Russell 2000 Index is now in a bear market because of the 20% decline from the contract high. Value-seekers are going to try to put an early end to the bear by aggressively buying the index on the current weakness, or aggressive short-sellers are going to continue to press this market even lower.

The key support area to watch today is 1057.60. The daily chart opens up under this price level with 1017.70 the next potential downside target. Although there may be a couple of stops and starts on the way down because of minor short-covering rallies, there is no solid support until 1017.70.

On the upside, a series of downtrending angles are guiding the index lower at a pace of at least 4.00 points per day. The first angle comes in at 1074.20, followed by angles at 1089.80 and 1101.50.

Because of the excessive volatility the past two days, traders may take a breather today to allow the volatility to collapse a little into the norm so there may be a two-sided trade at 1057.60. Try not to get caught in the chop today. Wait for clear signals with identifiable exits.

Trader reaction to 1057.60 should set the tone for the day.