After an earlier pop on the heels of Turkey's interest-rate hike, futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) were last seen sitting below breakeven. In morning trading, investors will be chewing over earnings reports from the likes of AT&T Inc. (NYSE:T), The Boeing Company (NYSE:BA), and The Dow Chemical Company (NYSE:DOW), among others. However, today's market-moving event is the afternoon release of the Federal Open Market Committee's (FOMC) latest policy decision. Economists are expecting the Federal Reserve to reduce its monthly asset-purchase program by $10 billion to $65 billion.
Meanwhile, "Monday's low of 1,772 on the S&P 500 Index (SPX) -- which came amid aggressive selling -- held on Tuesday, so I'd watch the 1,770-1,780 range for a cue as to the next bigger move," commented Schaeffer's Senior Trading Analyst Bryan Sapp. "A break on either side of this range would likely be the signal."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are roughly 44 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,225,915 call contracts traded on Tuesday -- the fewest since Jan. 3 -- compared to 648,952 put contracts. The resultant single-session put/call ratio arrived at 0.53, while the 21-day moving average remained at 0.54.
From the Trading Floor
"All eyes will be on the Fed today, and I'm mostly concerned with the reaction, or lack thereof, to the news," continued Sapp. "Many market participants are expecting an announcement that a tapering of asset purchases will continue, and it could be reasonably inferred that this will cause the market to go lower. If there is a reaction opposite to what is 'expected,' given the news, then that would be a sign that sentiment has drifted too far in one direction, and a contrarian position should be taken."
Currencies and Commodities
Earnings and Economic Data
On Wednesday, weekly crude inventories are due out, and the FOMC will announce its latest policy decision at 2 p.m. ET. Scheduled to post earnings are BA, Facebook (FB), Biogen Idec (BIIB), Citrix Systems (CTXS), DOW, EMC (EMC), Energizer (ENR), JetBlue Airways (JBLU), Las Vegas Sands (LVS), Marathon Petroleum (MPC), QUALCOMM (QCOM), Southern Company (SO), Tractor Supply (TSCO), and Valero Energy (VLO).
The Case for Big Moves in IWM and QQQ
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