Fed Decision Gets Some Attention

Today is a rate decision day for the Fed. The market is only paying a modest amount of attention to the FOMC meeting. Simply put, traders don't expect to hear anything, and they don't want to hear anything. The rest of the market is relatively quiet, with IBM looking (still window shopping?) to buy Sun Microsystems (JAVA), which is catching some chatter. In addition, ADBE and GIS reported earnings, but neither will move the overall market.

Pre-market futures are down slightly, but the market is pausing to contemplate more than anything. Traders may try to build off yesterday's gains eventually, especially if the are convinced the Fed isn't going to break anything today.

From about 762 and up yesterday was somewhat unusual price action on the SPX. The market blew off the Shooting Star, which means the Shorts and Bargain Bulls are still fixated on and anxious about stocks. This is an extreme swing, which means that it's possible that traders reach as far as the 800 area on the current upswing.

Here is a chart of the SPX:
(click on image to enlarge)

The SPX is prodding the current short-term resistance in the 770 - 780 area. The next intra-day move could take the market as far as 785 - 790, and as I mentioned above, if traders continue to be in an extreme mood, then 800 is not out of the question on another move after that. The latter stages of the day yesterday, and the latter stages of this upswing are extreme moves, but not unprecedented. Fund managers are feeling warm and fuzzy, and completely twitterpated with the stock market again. It's as I stated before, we experienced a seed change durning the News Bogey Gauntlet, and the Fundies are buying it hook, line, and sinker. And when traders get this way, I've learned to just go along with it, so as I stated yesterday, I'm not interested in loading up on any puts. The market will have to prove a roll-over for me to buy puts, and even then, as I have said for several days, any pullback will probably only retrace a portion of this upswing, and the SPX is probably headed for a higher low and trend change in the next week or so.