..Drive by surprise!

If global markets down on ‘poor’ eco data weren't enough, notably China’s demand trending down, the FOMC added some pie to the face this afternoon!. As it turns out and as speculated here last Thursday before the job report report…“Starting to think buyers on fence will wait for FOMC next week to decide… but this peak will eventually be decided post FOMC“.
Since incremental changes were thrown around last week (see article yesterday) , the sentiment that anything was going to be done was slowly being reversed by FOMC time. This is clear in the action in USD and treasuries the past week, which are the mouth's of the FED when it comes to what the market is thinking will be done or not. Everything pointed to this being a non-event by 2:15pm as 2yr TSY were weak and USD was being short covered, carry trade unwound with anticipation of ‘nothing material’, but than ‘kaboom’ and a short lived celebration. As said, “..think QE2 would likely do more damage.”… The ensuing post FOMC stock spike that recovered almost to 1127 really stunk. Did you see your individual equity watchlist go with the spike?. Absolutely not, this was a pure ETF and Futures move. Stocks got no bid!… Even all those that wanted some QE and said the market would rally on such seemed not to want to participate and instead did some profit taking!. Simply, as pointed out so eloquently in a post tonight, something in the economic picture in the past few weeks (since the hearing with congress) made them run to bathroom, FED's economic assessment shift suggests a bigger down shift, worse growth outlook and therefore more policy changes ahead. After some refection, the market tonight is getting the same drift thought here that this would only put fear in investors. What does the FED know, that we don't by changing their outlook with this policy shift so quickly and without giving a hint of such recently to the market. This needs some answers/ clarification. The fact the FED is willing to act is really of no consequence as it’s the expectation and not a reason to rally the market in our view as many claimed it was.
One thing is clear and that is on the charts now that 1131SPX is out of view instantly with 200ma about to be cracked.. The July low points trendline has to hold!. Also, this would put the 20ma in jeopardy, which is the benchmark buy and sell line when it’s broken in either direction here. Buying this dip is not on the agenda here, we’ve seen many times if a big one day slide occurs, traders/ investors are not willing to step up until some stability or clarification in this case needs to occur. If some ‘spin’ clarification is sufficient the market will hold, but it seems pretty cut and dry as to what the FED did and why.