Here we are again, waiting on the FOMC announcement. The Standard and Poors 500 Index (SPX) dropped off $6 to close at $1781, while RUT dropped $1 to close at $1119. Trading volume was flat to down with 2.1 billion shares of the S&P 500 stocks trading, slightly down from yesterday. Trading on the NYSE declined 1% and trading decreased 5% on NASDAQ. Volatility has been steadily increasing each for the past several sessions, from 13.5% on December 9 to today's close at 16.2%. This suggests that the big institutional traders are a little concerned about the market's reaction to the FOMC announcement tomorrow afternoon. And I am concerned after watching the VIX steadily rise each day; it even rose yesterday when the market rallied!

That was a significant part of my reasoning in closing the remaining 1030/1040 put spreads from my December condor. These spreads were over four standard deviations OTM, so they appeared safe and most likely would expire worthless this weekend. But I decided it made more sense to confirm a nice gain and stand aside until the dust settles. This completed the close of our December iron condor spread on RUT with a gain of $3,530 on 20 contracts or +25.6%.

The Consumer Price Index (CPI) issued today with a flat, unchanged reading for November. CPI and PPI have been turning in flat numbers for several months, but this doesn't seem consistent with my personal daily shopping. I don't have any structured data, but it certainly seems like many of my food staples have been rising in price.

Buy your popcorn and settle in for the FOMC show tomorrow afternoon. Will the Fed make noises about reducing quantitative easing and cause the market to tank? Or is that news already priced into the weak sideways trading we have been seeing? Or will the oft predicted market correction be triggered as everyone tries to lock in their gains for the year? Or will the Fed assure everyone that the party will continue? It should be interesting...