Waiting on the Fed. I don't recall any time in my long history of trading that I have heard that phrase more often. On the other hand, I can't think of another time in history when the Fed was so intertwined in our markets. But that is the reality; we are anxiously awaiting the FOMC announcement to see if the Fed has decided to start the slow tick higher of interest rates. Then the question will be the market's reaction. Everyone has an opinion, but those pronouncements are really just guesses. Higher interest rates normally slow down the economy since it effectively increases the cost of capital. But a quarter or half point increase from here doesn't seem like it would hinder much in the economy. One could argue that an interest rate hike has been priced into this market for some time, so it shouldn't have a devastating effect. One could even reason that a rate hike would be taken as an endorsement of the state of the economy and the market would trade higher. Who knows? So we wait on the Fed.

SPX closed down $8 at $1953 today and RUT lost $4 to close at $1153. Volatility increased a bit with the VIX closing one point higher at 24.2%.

Trading volume fell way off with only 1.8 billion shares of the S&P 500 stocks trading; the 50 dma is 2.4B. Trading volume on the NYSE dropped 5% and volume fell 13% on NASDAQ.

Today's low volume, sideways to lower trading will probably be typical until Thursday afternoon. Even then it will be at least 24 hours before we see the full effect on the stock market. Sometimes traders have to read the announcement and sleep on it before they are convicted of a course of action. If you are on the sidelines, don't jump too quickly on Thursday. In fact, I don't plan to make a move until Friday or possibly even Monday.