As expected, the FOMC minutes resulted in a lot of price volatility this afternoon. Immediately upon the release, SPX dropped $9 in less than 10 minutes, and then reversed on a dime and shot up almost $18 in the next 40 minutes. If that wasn't enough, then SPX turned and dropped over $14 before the close at $1643 for a net loss of $10 on the day. RUT gave up $7 to close at $1022. SPX tried unsuccessfully once again to regain the 50 dma at $1658. The most pessimistic signal I saw today was a one point increase in the VIX to 15.9%. This shows that traders are beginning to be concerned that this pullback may gain momentum; we are now down 4% from the early August highs. Are we heading for a more serious correction of 10% or more? As a reminder, the correction in August of 2011 was over 20%.

The Fed minutes seemed to throw cold water on the notion that the committee is poised to begin tapering in September. The consensus of economic analysts, at least as represented by interviews on CNBC over the past week or so, appeared to favor tapering beginning in September. Many of the guests acted as though this was a foregone conclusion. But it appears that the committee was largely divided on that issue, at least at the last meeting. As I read the minutes, it appears that multiple viewpoints are represented on the committee on the timing and duration of tapering, as well as adherence to the 6.5% unemployment "line in the sand". Maybe that is why the market's reaction this afternoon was so volatile. It will be interesting to observe the market at the open tomorrow after thoroughly digesting the minutes. HP's earnings announcement may tend to favor the bears tomorrow. We'll see.

Does this continuing lack of clarity lock us into a sideways consolidation until the September Fed meeting? Or does it give the bears control?