One of those rare days in the past few months where we are not gapping up or down 1-2% to start the session. The bipolar direction of risk on or off must wait til this afternoon.
We had a pukey selloff to close the day yesterday as there were no reports regarding the Greece conference call part deux until after 4 PM. And when reports came in, essentially the ball was kicked two weeks so we can look forward to the same action in early October. We can still assume Greece will get the next tranche of bailout funds, but they are going to drag it out.
Other than that, all eyes on the Fed announcement at 2:15 PM although everyone essentially knows what is going to happen as its been telegraphed since Jackson Hole in late August. To move the market, I would assume Ben would need to do something over and above everyone's expectations of Operation Twist at ~$300-$400B. The market has already done most of the work by pushing 10 year yields to sub 2%.
With that already baked into the cake, by 2:17 PM the demands by Wall Street speculators should begin for QE3. And we can begin the whole song and dance again. (keep in mind we are effectively doing $350Bish of QE annually as it is....aka QE 2.5 simply thru the reinvestment programs to keep the balance sheet steady - so it's not like we are not doing a form of QE at all times)