E-mini Russell 2000 Index (TF) Futures Technical Analysis – July 11, 2016 Forecast

September E-mini Russell 2000 Index futures rallied sharply higher on Friday as the latest U.S. Non-Farm Payrolls data failed to put any fear investors that the Fed was likely to raise interest rates anytime soon. Additionally, the recent price action suggests investors are anticipating more stimulus from the Bank of England and the Bank of Japan. This could greenlight another leg higher.

The main trend is up according to the daily swing chart. The main trend turned up when buyers took out the 1158.30 main top. The new upside target is the main top at 1178.30. This is followed by the December 1, 2015 main top at 1192.40. A trade through 1125.60 will turn the main trend to down.

Today is the ninth day up from the bottom on June 27 so the index begins the session in the window of time for a potentially bearish closing price reversal top. This doesn’t mean you should try to pick a top, but start preparing to move up stops if the intraday charts start to show topping action.

Based on Friday’s close at 1173.50, the direction of the market today is likely to be determined by trader reaction to last week’s high at 1176.00. Upside momentum is going to continue through this level, or it is going to turn down.

A sustained move over 1176.00 will indicate the presence of buyers. The first target is the main top at 1178.30. Taking out this top will reaffirm the uptrend. This could generate the upside momentum needed to test the next main top at 1185.10. This is the last resistance standing in front of the December 1, 2015 main top at 1192.40.

A sustained move under 1176.00 will signal the presence of sellers. This could trigger a break into the nearest uptrending angle at 1173.60. This is the trigger point for an even steeper break with the next target angles coming in at 1149.60 and 1148.70.

Watch the price action and read the order flow at 1176.00 today. Trader reaction to this level will tell us if the buying is getting stronger or if the rally is losing momentum either because the selling is getting stronger or the buying is getting weaker.