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The markets were quiet today as traders begin to anticipate the FOMC announcement on Wednesday. The prevalent opinion of the Fed watchers is that no interest rate hike is on tap, but many observers are worried.

SPX backed off three dollars to close at $2020 and RUT closed down $3 at $1084. Volatility rose a bit as traders begin to hedge positions; the VIX closed at 16.9%, up about 0.4 points.

There were no significant economic data reports today. The PPI, CPI, industrial production figures, capacity utilization, and weekly unemployment claims come later in the week, but the gorilla in the room is the announcement from the FOMC Wednesday afternoon.

Trading volume was down today with only two billion shares of the S&P 500 companies trading today. Trading volume declined 14% on the NYSE and was down 18% on NASDAQ.

If the Fed announcement is a non-event for the market, will the bullish run of the past several weeks continue? SPX is holding right at the 200 dma, and depending on how one draws the bearish trend line from the November, December and January highs, SPX is at or slightly below that trend line. Traders are watching for a break-out above that trend line to be confident that the bulls are back in charge. Otherwise, the conventional wisdom is that this has been a short-lived rally within a bearish trend. It is hard to predict the market's reaction to the Fed's announcement. Every word will be parsed.