Fed Protection

In the market, the longs always feel safe going ahead of the FOMC meeting.  There is an unnatural lift and anticipation due to these super easy monetary policies, but eventually the crowd overanticipates.  They overshot to the upside on more Fed insanity, realizing that it doesn't matter if the interest rate is tied to unemployment rate, because the unemployment rate will never get there, or will be manipulated to stay at 6.6 or 6.7 for the LONGEST time.  In any case, I was surprised that Bazooka Ben didn't go for a $60M in Treasury purchases with the $40M in MBS for a round hundo bill a month, just for kicks.  He only met market expectation, which shocked me.

We've had 2 intraday reversals in a row after hitting rally highs,  the market is exhausted and overbought, and one of its catalyst bullets have been spent.  The only one left now is fiscal cliff deal, and that is only a positive catalyst if its a total can kick with payroll tax cut extended.  If there is no payroll tax cut extension, you will have a recession in 2013. 

I can't really recommend shorting in the hole, but you can probably safely short around SPX 1430 for the next few days.  We might even get a decent down day for once and stay down for more than an hour.