Ryan Mallory's  Instablog

Current Short Positions (stop-losses in parentheses): DTV (40.50)

BIAS: 7% Long

Economic Reports Due Out (Times are EST): Producer Price Index (8:30am), Retail Sales (8:30am), Redbook (8:55am), Business Inventories (10am), FOMC Meeting Announcement (2:15pm)

My Observations and What to Expect:

• Futures are up slightly heading into the open.
• Asian markets were once again mixed while European markets are slightly in the negative in trading. .
• We had another intraday sell-off in the S&P at the close, similar to what we saw back on 12/7. The sell-off doesn't appear to be indicative of a major shift in the behavior of the market and still fits nicely within the context of the existing trend upwards. 
• Today the Fed releases its FOMC statement, which I will post upon its release. Last time they spoke, there was an unusual amount of volatility (extreme moves in gold and dollar) prior to the announcement. So beware.
• It is very difficult to play the Fed announcement as there is numerous head fakes upon the release of the FOMC statement, and any move initially should be viewed through skeptical lenses.
• Of late, most FOMC Statements have been embraced ultimately by the bulls - but sometimes that embrace doesn't occur until the day after the announcement. Prior to the announcement, price movements typically are contained within a narrow range.
• 1227 could be back in play today if the FOMC statement is not well received. 
• As noted yesterday, while we still have overhead room to the upside for the market to still run, I wouldn't be overly surprised if we consolidated a bit at current price levels. 
• Volume continues to come in at below average. 
• Below 1227, should we break it, the key support level for the S&P would become 1216 - the lows of previous consolidation.
• Dip buying will continue to be the name of the game for traders.
• Dollar looks more and more like it is preparing for another leg down - on the verge of a lower-low.
• For the bears - Use the FOMC statement to instantly drive these markets lower - no better opportunity, should Bernanke and Co. include in the statement language that isn't well-received by the street. A close below 1227 is a must for them, to thwart the bullishness of the markets. 
• For the bulls - HOLD, HOLD, HOLD the 1227 level after the FOMC release. Anything else is just cherries on top.

Here Are The Actions I Will Be Taking: