The markets traded up strongly today, but the bears pulled the market back during the last hour of trading. SPX traded up to $1220, a strong resistance level, and pulled back to close at a small $2 loss at $1202. RUT traded down $12 to close at $690. Trading volume was flat to down with 2.9 billion shares of the S&P 500, down from yesterday and below the 50 dma. Trading volume on the NYSE and the NASDAQ was up 1%.

Traders are focused on the FOMC statement due out tomorrow afternoon. In my opinion, there is an unrealistic expectation for the Fed to somehow pull the market out of this hole. Much discussion has focused on the expected "twist" program, but very few economists have an expectation that this would have much effect on the economy or the markets. Thus, my expectation is for the FOMC to disappoint the markets tomorrow. It is unclear whether this is priced in or not - perhaps today's sell-off was the anticipation of the announcement? In any case, it is hard to build a bullish case for this market.

My Oct iron condor at 500/510 and 770/780 stands at a P/L = -$1444 with delta = -$46 and theta = +$111. Now we return to Fed watching.