E-mini Russell 2000 Index (TF) Futures Technical Analysis – October 31, 2014 Forecast

December E-mini Russell 2000 Index futures are called sharply higher this morning. The catalyst behind the move was the announcement of new stimulus by the Bank of Japan.

The market is expected to open on the strong side of an uptrending angle at 1150.60 and on the bullish side of a downtrending angle at 1161.20. This puts the index in a position to challenge the September top at 1182.90. Taking out this level with conviction could trigger a further rally into the all-time high at 1205.70.

Because of the prolonged move up in terms of price and time, the Russell is still in a position to post a potentially bearish closing price reversal top.

The first sign of weakness will be a failure to hold above 1161.20, but breaking under 1150.60 is likely to trigger an acceleration to the downside. If this occurs then the next level to watch is 1140.20.

The daily chart opens up to the downside under 1140.20 with the next major support coming in way down at 1094.60.

Look for a bullish tone as long as buyers can hold the index above 1161.20. Watch for selling pressure on the first test of 1182.20. The first line of sell stops are probably a little under 1150.60.