Russell 2000 Futures (/TF) are interesting here.  On January 19th, the slow churn uptrend took /TF above a major level of interest at 775 resistance (pink line).  Since then, the slow churning upside action has continued. 

On February 3rd, /TF hit a road block at 835 and started a 30 point consolidation range between 805 and 835.  Consolidation support at 805 finally broke a month later on March 2nd, which resulted in just enough downside momentum to break the slow churn uptrend that started October 4th 2011 (yellow line).

Since Tuesday’s strong selling, we have seen two days of upside momentum.  This brings /TF close to a combination of uptrend resistance turned support & 805 consolidation support turned resistance.  From a reward to risk perspective, things are looking attractive on the bearish side in /TF.

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Russell 2000 Futures (/TF) are at a level of interest.  775 (red line) acted as a very defined level of support for first half of 2011.  It broke 775 with a hard downside move.  Since then it has only tested it as a level of resistance once, resulting in a pull back (grey oval furthest to the right). 

Now /TF is testing 775 from a resistance perspective again.  It has already managed to push through potential 200 day simple moving average resistance (blue line), so this may be an early sign that it is going to push through 775 and small caps are going to rally.  That said, the reward to risk favors a bearish position here.

Resistance at 775 can be played with 10 points of risk to the upside and about 30 points of potential reward to the downside.  That’s a 3:1 reward to risk, which is worth risking some capital on. 

Given the overall strength in small caps, we would personally keep the position small.  The push above 750 looks like a possible ascending triangle break, and measure to 825.  A break through 775 would likely lead to an 825 print pretty quickly.