The E-Mini Russell 2000 futures contract (TFZ0) has been trading range bound for five months and has developed extraordinary support and resistance levels along the way. The contract is now sitting beneath a major area of resistance that could influence price in a major way..
Resistance
The 672 level has been a razor sharp resistance level since the tail end of May. Price has stalled at this zone at least five times during this timeframe, with each test leading to a sell-off.
The TF is now testing this resistance level for the second time in two weeks, as it consolidated beneath this zone throughout much of yesterday’s trading. Clearly, a move away from 672 could spark the next big medium term move.
Watch yesterday’s range, 672.2 and 663.3, for signs of a breakout opportunity.
Given that yesterday’s range is quite narrow, we could be looking at a trending-type session today – one that offers a wider range of price movement. Another downside reversal could lead price back toward 645, while an upside break could spark a move back toward 719.
Ultimately, the TF is at a decision point. Once direction is decided, a solid move could be seen.
Let’s see how this one plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
