The markets have been showing signs of weakness for several days, most notably RUT's lack of leadership while SPX traded higher. That trend continued this morning with RUT trading lower even as SPX traded upward. But then SPX weakened and traded down to about $1764 before the FOMC announcement at 2 pm ET. Then SPX traded even lower to its low of the day at $1757. But it recovered somewhat before closing down $9 at $1763. In stark contrast, RUT traded lower all day, hitting its low around 2:45 pm ET at $1104 before closing at $1106, down $16.

Volatility spiked during the trading day but settled at the close with VIX at 13.7%, down only two tenths of a point. RUT's comparative weakness is a bearish sign for the market. Trading volume was flat with 2.1 billion shares of the S&P 500 trading. Trading volume increased 2% on the NYSE and was flat on NASDAQ.

The consensus expectation for the FOMC announcement was a continuation of stimulus, given the weak economic data reported since the last meeting. I had expected SPX to spike upward after the announcement, and thought I would hedge or close my Nov call spreads. But after watching RUT lead lower all day, I decided it was safe to leave my November iron condor in play. It remains underwater, but the delta of the 1800 calls is now down to 16, so much of the pressure has been relieved.

The question for traders is whether this is merely a brief consolidation phase in the bull market or a trend reversal. That question causes me to reflect on the advantages of non-directional trading...