Talk about whiplash! Yesterday, SPX only lost one dollar and held support. But the NASDAQ composite lost $45 (1%) and RUT lost $14 (1.2%). That got my attention and I closed several of my directional trades. But today SPX roars back, closing at $1999, up $15, and RUT tacks on $4 to close at $1151. NASDAQ moved back into its trading range, closing at $4553, up $34. The strange part of these two days in the market is the upcoming FOMC announcement tomorrow afternoon. Normally, we would have seen a calm sideways market as traders waited for that announcement, but not so this time. I'm not sure what that means. At a minimum, it shows how nervous traders are, anxiously jumping on and off the bandwagon at the slightest news or rumor.

Trading volume rose a bit with 1.8 billion shares of the S&P 500 stocks trading. Volume rose 13% on the NYSE, but dropped 4% on NASDAQ.

Volatility popped up about a point yesterday, but the VIX lost 1.4 points to close at 12.7% today.  The only economic news was the PPI, flat at zero change, so that helps calm the inflation fears. Maybe that caused traders to be less concerned about the Fed moving up their time table for increasing interest rates.

So the Fed watch continues. It will pay to be cautious as this saga unfolds.