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.