Thursday's Market Minute: Russell Remains Range-Bound After Breakout Busts

Russell 2000 futures this week broke free from a downward sloping trendline beginning with the mid-August highs. However, the small-cap contract failed to make new highs after stalling out and closing near the previous highs from Oct. 4 near 1,780, and now looks to be establishing a range between there and where price bottomed out multiple times since June at about 1,645.

Looking at the tape more closely, price broke above the 21-day Exponential Moving Average but was quickly slapped back down, topping out near 1,794, just below the 63-day EMA. Consider as well that the Parabolic SAR (an indicator traders use to determine trend direction and set stop losses) has seen three crossovers this month, suggesting choppy price action and a lack of clear trend. Despite all this, momentum seems to be trending upward according to both the Relative Strength Index (RSI) and the Moving Average Convergence-Divergence (MACD) indicators, and price is also starting to make higher lows. 

In terms of further support and resistance, the 1,800 level is likely a point traders will be watching as it is both the point of the yearly +50% Linear Regression Channel as well as a point that may have psychological importance as it is a round level. To the downside, watch the yearly Linear Regression Line near 1,681.

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