Daily RUT

Following on from the weekly Russell review. First take a look at the daily RUT chart. To me this is a very interesting chart.

There are things happening here that suggest we could go back up to 853.4 with a critical intermediate potential rist area at 836.71.

If we can close beyond this then we should see the higher level this month imo.

There are potential stumbling blocks to the upside at 839, 844 and at 850.

If we can't get the close beyond 836.71 then we should see 828.53 again pretty quickly, though this time down look for a bounce right off it.

You can also see that Friday's low was pretty much a failed test of the prior natural pivot on May 24, against which it should be considered a potential higher low.

There were also reasons on this chart why the low was exactly where it was.

With these two coinciding events I would now look for a test of the last natural pivot high on May 23, now turned into resistance at 845.9.

Supporting this view is the quasi market profile that, to me, looks like it has to go higher. You can also see that the monthly point of control (the blue arrow) still stands at the top of this last correction, at about 849.4. If however price spends any time at its current level (more than a day), then the POC will move down and we will be in a new ball game, albeit the profile still looks unfinished to the upside.

Like the weekly Russell, price has poked below the monthly developing value area low - been rejected - and is now back into the developing value area. This action is good for the bulls.

Other than perhaps there being unfilled space above the low prior to May 24, there is nothing on this chart for me to the downside. Well, let me qualify that. There is nothing beyond the fact that we should go down to 785 and then 770 ..... but that is hopefully for another day.

Weekly Russell

Talk about a diabolical close. This week's Russell closed right on the line at 842 (well that was the CME settlement price), leaving us in a quandary about forthcoming action.

The histogram is Ensign's quasi market profile and the top pink arrow is the value area high. You could interpret last week's poke down as the other timeframe seller's attempt to get price back into the year's (developing) value area. Clearly it failed, perhaps setting the scene for higher price level value acceptance and continuation to the upside. Obviously we can't rule out further attempts to move it down.

A close below 842 would have been extremely bad news for the bulls, so I guess the fact that this has been avoided should indicate there is still a lot of strength in these markets.

However, I have seen similar price action lead to a continuation down and if we get a weekly open below 842 then we could easily see 807 in short order, though prior to that we have the yearly point of control at 813.5 'ish.


Another glance at the chart might show you what may be a developing triangle. A situation not unheard of at this time of year.

To prove the point here is last year's summer Russell.

So the week's open would seem to be critical - when is it not I suppose?

Above 842 should establish support at this level and we should first see a test of 848.5. If responsive buyers are found then we should go on to take a look at 851.5 and beyond that a test of last week's high at 856. If we can get a good daily close beyond any of these numbers then 870 is not out of the question.

An open below 842 should set this as resistance and we should see a test of 836. If sellers are found in quantity then we should go down to tickle 830. And if beyond that, then last week's low at 825.9 should be examined, perhaps leading to the 807 already mentioned or at least the yearly POC.

From a day-trading perspective if pushed, then I would read recent action as showing strong resistance at around 848.5 and enough support at 830'ish for a bounce, though I believe 848.5 will prove stronger rist than 830 does support.

Offsetting this was the failure to close the week below 842. So I would view an open above this as an indicator of further strength and I could easily see the 870 scenario evolving.

I will post analysis of RUT and other US indices to see if further light can be shed.