Support Coming For The Russell 2000?
When analyzing a market and looking for critical levels and directional movements, trades will have to back track over a longer period to see where we had key breakout and key breakdown points. Looking at Russell 2000, we have seen significant swings in this pocket since May of 2022, and we are now trading lower and looking to test some key levels.
Overhead Resistance Channel:
After we began to break down in April of 2022, the market has really whipsawed back and forth, and we have seen this overhead resistance pocket tested 3 times and have rejected these levels each time, indicated strong selling pressure at this point.
Old Resistance, New Support:
The old resistance, new support level is going to be crucial as the market is getting slammed lower looking to find its footing. We initially saw this level acting as strong resistance, and in November of 2020 the market exploded higher through this level with great conviction. Although the market has traded below this level, we have consistently seen strong rallies back out above this point, and it could be a great landing spot for the Russel in the near term if the selling continues.
Major Trendline Support:
In addition to the new support level, there is also strong trendline support going back to September of 2020, and when we have broken support, this level has consistently held in an upward trend. Looking forward, this trendline is lining up with strong support neat 1750, and bulls will need to defend this level to have any sort of sustained rally.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Overhead Resistance Channel:
After we began to break down in April of 2022, the market has really whipsawed back and forth, and we have seen this overhead resistance pocket tested 3 times and have rejected these levels each time, indicated strong selling pressure at this point.
Old Resistance, New Support:
The old resistance, new support level is going to be crucial as the market is getting slammed lower looking to find its footing. We initially saw this level acting as strong resistance, and in November of 2020 the market exploded higher through this level with great conviction. Although the market has traded below this level, we have consistently seen strong rallies back out above this point, and it could be a great landing spot for the Russel in the near term if the selling continues.
Major Trendline Support:
In addition to the new support level, there is also strong trendline support going back to September of 2020, and when we have broken support, this level has consistently held in an upward trend. Looking forward, this trendline is lining up with strong support neat 1750, and bulls will need to defend this level to have any sort of sustained rally.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
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