Mini Russell 2000 Testing Key Support Levels

Ilan Levy-Mayer |

I believe that as of late, the Russell 2000 index and it's future contract, the mini Russell 2000 are the leaders in stock market behavior. With the recent sell off in equities, the big drop in China's index, and the 4% drop in the Nikkei this morning, I wanted to get more clues about what may lay ahead for our equities and I opened my daily Heiken-Ashi chart for mini Russell 2000.

What I see is a market that has tested key support areas right around the 1224 ( September contract) three times! I also measured the move down that we had between April 27th and May 6th, and the move down we currently have is almost the EXACT magnitude.

While I believe that medium to longer term we should see a more meaningful correction for the short term, (i.e. the next few days) I think we will see a bounce from this levels as long as we can hold, and not close below 1224.

A Number of Options

There are more than a few ways to play this, the first is to try and go long around 1230 and place a stop below the recent lows. Another is to wait for a close below this level and establish longer term short positions. In between the volatility, intraday provides MUCH range, opportunities and risk....



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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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