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September E-mini Russell 2000 Index is trading flat after a disappointing U.S. retail sales report. Investors were looking for an increase of 0.5%; the report delivered a 0.2% reading. This is further evidence the U.S. economy slowed during the third quarter.
Although the retail sales report did not meet expectations, it should not alter the Fed’s plan to begin reducing monetary stimulus by the end of the month. Currently, the Fed is buying $85 billion per month in government bonds and mortgages. The recent weaker-than-expected jobs report suggests the central bank may reduce its purchases by $10 to $20 billion.
Daily September E-mini Russell 2000 IndexThe main trend is up on the daily chart. The main range is 1006.20 to 1057.90 with a retracement zone at 1032.00 to 1025.90. This is the next major downside target should sentiment shift from bullish to bearish. The nearest Gann angle support is at 1038.20. On the upside, a trade through 1057.90 could trigger an acceleration to the contract high at 1062.00.
Besides the economy and the Fed meeting next week, investors are still watching developments between Russia, the U.S. and Syria. The news has been quiet; headline news could trigger volatile moves at any time. With the Fed meeting next week on September 17 and 18, traders may decide to pare positions ahead of the central bank’s next announcement. This could put pressure on the index today.
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