E-mini Russell 2000 Index (TF) Futures Technical Analysis – October 29, 2013 Forecast

The December E-mini Russell 2000 Index is trading better this morning, but the trade has been slow. The major players are on the sidelines ahead of Wednesday’s Fed announcement, therefore, today’s action is being supported by small investors and traders. With big money unavailable to stop the market, we could see a choppy two-sided trade.

Since topping last week at 1120.50 and breaking to 1103.20, the market has mounted a labored comeback rally. The main trend is up, but the momentum has slowed considerably, indicating that perhaps the index is going through a transition period. If this is distribution taking place then investors should watch for the start of an overdue correction.

Today’s key support is the short-term uptrending Gann angle at 1104.80. Taking out this angle with conviction could trigger the start of an intraday sell-off. If downside momentum continues to build then look for an attempt to take out the last swing bottom at 1103.20. A trade through this price will turn the main trend to down.

The daily chart indicates there is plenty of room to the downside with an uptrending angle at 1090.70 a potential near-term target. Based on the main range of 1034.70 to 1121.80, the main downside target is the retracement zone at 1078.25 to 1068.00.

Today’s U.S. economic reports did nothing to change the tone of the market. In addition, investors are more interested in what the Fed has to say tomorrow. Traders have already taken out an October tapering and now want to know if the Fed has already taken a December tapering off the table.

Look for a two-sided trade today with the market straddling the angle at 1104.80 throughout most of the session. How the market reacts around this angle will set the tone for the day.