equties FOMC 28/05/25I think rates will be held in FOMC and equities will suffer temporarily. Sells inbound
M2KU2020 trade ideas
RUT RTY1! IWM: Trade⚠️ Short Bias on RTYM (E-Mini Russell 2000 Futures)
Price has rejected the premium zone with clear BOS and CHoCH formations, suggesting distribution. Currently sitting below EMA clusters with weak bullish follow-through.
Volume confirms distribution. Targeting the equilibrium zone (1981.1) as next area of interest for a potential bounce or further breakdown.
Bias: Bearish
📉 Target: 1981.1
⏱️ Timeframe: 1H
#RTYM #Futures #SmartMoneyConcepts #TradingView #Russell2000 #VolumeProfile
Russell 2000: Looking Past the Short-term VolatilityCME: Micro E-Mini Russell 2000 Index Futures ( CME_MINI:M2K1! )
On Saturday, May 3rd, Warren Buffett took the center stage of the Berkshire Hathaway annual shareholder meeting. “What has happened in the last 30, 45 days … is really nothing,” declared the “Oracle of Omaha”.
Buffett brushed off recent stock market volatility that has rattled investors over the past weeks. “This has not been a dramatic bear market or anything of the sort,” he said.
In April, U.S. stock market took a deep dive after the start of Reciprocal Tariff against all U.S. trading partners. A few days later, we witnessed spectacular rally with a record daily gain, as a 90-day tariff pause was announced. On May 2nd, the S&P 500 completed a 9-day winning streak, the longest in 20 years.
After a month-long rollercoaster ride, the U.S. stock market is back to where it started. If an investor bought stocks in the beginning of April and then slept for the whole month, he wakes up today and may not even notice any changes in his portfolio.
Sunny Days ahead after the Storm
I concur with Buffet’s assessment that the U.S. economy is fundamentally strong. The supply chain disruptions are painful and will lead to product shortage, higher prices and layoffs in affected industries. However, trade conflicts will be resolved in a few months. The U.S. will be in a strengthening position, making its economy more sustainable.
The U.S. economy contracted 0.3% in Q1 2025, the first negative reading since 2022, according to the Commerce Department. However, the underlying data is much better if you look past the headline.
The formula: GDP = C + I + G + (X - M), where:
• C is consumer spending; I is investment by private business
• G is government spending; (X-M) is the net of exports minus imports
The key driver of the negative GDP is Imports. US buyers front-run the tariffs with massive orders, resulting in a 41.3% increase in imports. We also see a 21.9% gain in investment, primarily the result of US businesses building up inventory with imported goods.
• Imports and Investment contribute -4.83% and +3.6% to Q1 GDP, respectively. Both are one-time events and should not be taken as a long-term trend.
• Consumer spending grew 1.8% in Q1, contributing to 1.21% of GDP. Government spending contracted 1.4% in Q1, contributing to -0.25% of GDP.
Real Story: Q1 constant dollar GDP is +3.5%. By using a price deflator of 3.7%, the government reports a -0.3% “Real GDP at seasonally adjusted annual rates.”
Separately, the Bureau of Labor Statistics (“BLS”) reported that total nonfarm payroll employment increased by 177,000 in April, beating market expectations. The April unemployment rate was 4.2%, in line with expectations.
The above data supports my assessment of a solid U.S. economy. Once we walk past the tariff fear, the stock market will likely resume its growth.
Small Firms May Benefit More from New Trade Policies
A global supply chain helps corporate giants source from the most efficient and lowest cost suppliers. Small businesses may not be so lucky. Take the US textile industry as an example, the BLS data shows that 80% of domestic jobs have been lost since 2000.
The "de minimis" exemption is an import loophole that allows overseas packages under $800 to come into the U.S. duty-free. According to BLS data, e-commerce giants like Amazon, Shein and Temu source 80-90% of their products from overseas.
Closing the "de minimis" loophole and enacting fairer trade deals will help domestic manufacturers. By shielding from low-cost import dumping, a revitalized US manufacturing industry may not be far fetching.
Of the four major US market index, Russell 2000 performed the worst, flat in the last twelve months. Based on my analysis above, the Small Cap Russell index may have a better growth outlook compared to blue-chip indices.
Trade Setup with CME Micro E-Mini Russell 2000 Index Futures
Traders who take a bullish view in Small Cap could buy the Micro Russell Futures (M2K).
M2K contracts have a notional value of $5 times the index value. With Friday settlement price of $2042.70, each September contract (M2KU5) has a notional value of $10,213.5. Buying or selling one contract requires an initial margin of $932 at the time of writing.
The reason for selecting the September contract rather than the more liquid June contract is the time it takes to negotiate trade deals. While some trading partners may reach agreement within the 90-day window, others may not.
Micro Russell futures (M2K, $5) contracts tap into the deep liquidity of E-Mini Russell futures contracts (RTY, $50). As of last Friday, RTY has an open interest (OI) of 457,283 contracts, while the OI for M2K is 41,563, according to data from CME Group.
The risk of long Russell futures is a decline in the index. To hedge against the downside risk, a trader could set up a stop-loss in his buy order.
Hypothetically, a trader enters a buy order of M2KU5 at $2050 with a stoploss at $1950.
• If the Russell goes up 10% to 2,255, the trade will gain $1,025 (= (2255-2050) * 5). The theoretical return is 110% (= 1025/932). This is 10 times bigger than the gain in the underlying index, thanks to the leverage built into the futures contracts
• If the Russell falls 10% to 1,845, the maximum loss with be $500 (= (2050-1950) * 5). This is less than the initial margin of $932 and the trader will not face a margin call. The loss is limited even if your view is incorrect, thanks to the stoploss feature
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Russell 2000: Signs of Topping as Macro Risks LoomRussell 2000 futures look sluggish heading into a week laden with macro risk events. Given the cyclical characteristics of the underlying index, any hint of weakness may amplify U.S. recession fears, increasing the risk of renewed downside for stocks.
Sitting within what resembles a rising wedge and with a possible evening star pattern forming, the risk of a resumption of the broader bearish trend is arguably growing. While bearish momentum has weakened recently, the uptrend in RSI (14) and MACD also appears to be topping out.
A break and close beneath 1917 would generate a setup where bearish positions could be established with a stop above the level for protection. The April 21 low of 1831 screens as a potential target. A break of that would open the door for a run towards the double bottom of 1712 set in early April.
On the topside, a break and close above 1994.8 would invalidate the bearish bias.
Good luck!
DS
RTY Daily UpdateSmall caps got hit hardest by the tariffs, fell the most, went up the least today, and has the furthest to go to fill the futures gap and also the all time high (ATH).
I think RTY (IWM ETF) will outperform ES/NQ (SPY/QQQ) the next 90 days as Trump unwinds all of the tariffs including the 10%. He'll more than likely repeal the China tariffs in the next week or so, which will be the next huge move up.
Trump is gaming the market, just go long with stock or long dated calls.
Russell 2000: Squeeze Potential BuildsWith uncertainty surrounding U.S. trade policy about to be resolved and price signals turning bullish, the ingredients for a squeeze in Russell 2000 futures are now in place.
Unlike other stock indices with far larger constituents, U.S. small caps have lagged this week’s rebound—potentially due to recession concerns, which wouldn’t help unprofitable cyclical firms tied to the broader economy.
However, while fundamentals point to downside risks, recent price signals have been more constructive. Monday’s hammer candle formed after a reversal from known support. While Tuesday’s doji signaled indecision, it still closed slightly higher, with strong volumes going through.
While signals like RSI (14) and MACD remain in negative territory, bearish momentum is starting to ebb, suggesting we may be in the early stages of a turn.
Those considering bullish positions could look to establish entries above 1994.8 with a stop beneath for protection. Rallies over the past two sessions have fizzled around 2040, making that an initial focal point. If sellers there are overrun, it could encourage others to join the move, looking for a retest of horizontal resistance at 2132.5.
Good luck!
DS
RTY One hour time frame_LONG_+779 TicksThe RTY one hour time frame is in an up trend.
The market is making higher highs and higher
lows. The market has an up Fibonacci with an
extension price point 2170.1 about +779 ticks
above the market. As long as the market stays
above the up trend line. It will be a good idea
to look for long ideas towards the Fibonacci
extension.
Entry: Counter trend line break bullish above
the up trend line.
STOP: 2047.6
LIMIT: 2170.1
Another entry idea: If the risk is too large. It
will be a good idea to turn to the five minute
time frame and to look for long ideas towards
the one hour time frame limit.
Russell 2000 Futures: Bearish Reversal in Play?Russell 2000 futures may resume the bearish trend established earlier this year, trading below wedge support following the completion of an evening star reversal pattern on Wednesday.
Shorts could be established on the break with a stop above the former uptrend for protection. Support may be encountered around 2050, although 1994.8 looms as a more appropriate target for those seeking greater risk-reward.
RSI (14) has rolled over, while MACD remains negative despite grinding higher over the past fortnight, painting a picture of waning momentum that complements the bearish price signals.
If RTY were to reclaim the former uptrend, the bearish setup would be invalidated.
Good luck!
DS
the last stop hunt?Well "they" have been messing with the price for a number of days now. They have ended a number of sessions on a bullish move only to sell all day. If we pump overnight and tomorrow I think we can reasonably assume that Thursday was a stop hunt before the move up. This is looking increasing more likely overnight. Don't feel like you missed the bottom, just get in while you can. I expect a break from the new normal of massive selling all morning. Michigan consumer sentiment @ 9, don't get stopped out on that one as they will definitely spike it down to stop people out before they run the price up, if they actually do run the price.
Consumer Sentiment & Stocks MarketsStock Markets Track Consumer Sentiment Closely
The relationship between consumer sentiment and the stock market is evident in this observation. Historically, consumer sentiment tends to lead stock market movements, providing valuable insights into potential trends.
Personally, I consider the Russell 2000 Index as a reflection of mass consumer sentiment, given that it tracks the 2,000 smallest publicly traded companies in the U.S. market. Looking at the E-Mini Russell futures, consumer sentiment peaked in December 2024, and since then, I have been monitoring the Russell and other indices along their well-supported trendlines. When the Russell started testing its trendline in January, I became cautious about its uptrend.
The clean break on February 21 signaled a shift: Russell transitioned from an uptrend to a downtrend on the daily chart. Consequently, my trading strategy has shifted from buying on dips to selling on strength whenever opportunities arise.
Russell is Leading Dow Jones, Nasdaq and S&P???
Indices tend to influence each other, and leadership often rotates. While the Nasdaq has previously led market moves, this case study suggests Russell is currently taking the lead.
Technically, the overall U.S. market remains bullish as long as it holds above the primary uptrend line. A bear market is typically confirmed when the market drops 30%, and by then, it should break below all primary uptrend lines. However, waiting for that confirmation is too late—by then, the damage will be significant.
The key observation is that Russell has already broken its secondary uptrend line. Will the Dow Jones, S&P 500, and Nasdaq follow? If so, we need to make fundamental projections. Factors like escalating tariff conflicts could worsen inflation, directly impacting the broader stock market and indices.
Consumer Sentiment Still Below 80 Despite Pandemic Being Long Over
Given the current macro environment, consumer sentiment is likely to remain below 80 for an extended period. Additionally, there is a downside risk if geopolitical tensions escalate.
From past case studies, a consumer sentiment reading below 80 has often preceded a stock market decline. This historical pattern raises concerns about future market stability.
My Trading Strategy: Cautiously Bullish
• Technical Perspective: Apart from Russell, I remain bullish on other indices.
• Fundamental Perspective: Market sentiment leans toward pessimism.
• Conclusion: This dual outlook leads me to a cautiously bullish stance.
For Russell 2000, my preferred strategy is to sell into strength, guided by a downtrend channel. Another alternative is trading Micro E-Mini Russell futures (M2K) for precision and risk management.
📈 Happy trading!
Please see the following disclaimer and additional information that may be useful.
E-mini Russell Futures
Ticker: RTY
Minimum fluctuation:
0.10 index points = $5.00
Micro E-mini Russell Futures
Ticker: M2K
Minimum fluctuation:
0.10 index points = $0.50
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• My mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
Trading the Micro: www.cmegroup.com
CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
RTY_60 Minute_Bullish_+340 TicksThe RTY one hour time frame is in an up trend. The
market is making higher highs and higher lows. The
market has an up Fibonacci with an extension price
point 2336.0. It will be a good idea to look for long
ideas towards the one hour up Fibonacci.
Entry: Counter trend line break bullish in the buy zone.
STOP: 2256.2
LIMIT: 2333.2
Another entry idea: As long as the one hour time frame
stays in the buy zone. It will be a good idea to turn to
the five minute time frame and to look for long ideas
towards the one hour limit price.
U.S. Stock Indices In Recovery ModeU.S. stock indices have seen a lot of volatility with significant chop back and forth starting off 2025. With the new year comes a new administration, changing foreign policy, changing of the Fed interest rate environment, and a different earnings outlook for stocks. Looking at the small caps with the Russell 2000, the market has been in a range between the 50-day moving average and the 200-day moving average since the breakdown on December 18th, and has not been able to break on either side of these levels.
After a broad selloff starting off the week for the indices, the Russell has been climbing back higher after re-testing the 200-day moving average. The market has been trading above this 200-day moving average since December of 2023 and will need some type of catalyst to break out of the current range. The Russell, or small cap stocks in general, typically are the most sensitive to interest rate changes, and with the changing tone from the Fed and the probability of rate cuts coming this year, traders will be watching the Russell 2000.
Finally, we'd like to let all our readers know that CME Group has partnered with TradingView to host The Futures Leap, a 1-month trading challenge through which participants can learn to master futures markets, trade big events and compete for a share of a 25K prize purse. Click here to register for this event.
If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc.
**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
