Russell Futures Lagging Peers as Technicals Soften

Russell 2000 futures are lagging behind their other counterparts among the major equity index futures contracts, with the small-caps falling just over -1% yesterday. The S&P 500 futures and Nasdaq-100 futures, spurred on by a +6% earnings jump from Nvidia (NVDA), are both logging new all-time highs, while the Dow and Russell futures have actually declined on the week.

The /RTY contract saw some noteworthy technical developments yesterday. First, it closed below an upward trendline that began with the Apr. 19 lows as well as the short-term 9-day Exponential Moving Average. Additionally, the Relative Strength Index (RSI) also had a matching trendline with price, and it fell below it concurrently with price. Another thing to note is the ParabolicSAR, a study used by traders to help determine trend direction and set stop-losses, shifted from bullish to bearish yesterday, while the MACD is quite close to its own bearish crossover. The Average Directional Index (ADX) also shows quite a low reading below the 15 level, which suggests there is not a particularly strong trend in play in either direction, despite the recent rally since mid-April.

Despite these technical changes, things are largely still geared toward the upside. Price is only about 3.2% below the yearly highs, and still remains above most of the commonly followed moving averages, many of which are still trending upward. The RSI is still above the 50-midline, which means momentum is still favoring the bulls.

Still, the /RTY is up in early trading and looks poised for a green day today. If the bulls keep pushing to the upside, the broken trendline starting from the Apr. 19 lows could be a place to look for resistance around 2,115. There’s another downward sloping trendline starting with the yearly highs that comes in quite close to the uptrend line as well, and beyond that there’s the relative highs of 2,132.50 from May 15. To the downside, watch the 21-day Exponential Moving Average near 2,074 as one of the first sources of potential support. The yearly Linear Regression Line is not far below, coming in around 2,055, and the 63-day EMA is in the same general region near 2,048.