The real surprise could come on Thursday with the actual announcement of the upcoming POMO schedule. That's where a surprise taper could hit the tape -- hard.
SPY puts are still kinda pricy. The November 170 SPY put only lost 4 cents of value today, telling us that the market thinks a 70-handle plunge in the next two weeks still seems perfectly reasonable. I want to see these options react to the FOMC statement tomorrow like AAPL or GOOG options after earnings; once the "event" is out, the hedges are unwound and they rapidly lose value. Then, as we ratchet up towards the target mid-channel @SPX 1778, VIX can plummet in a final wave of complacency.
Yeah, that would be swell.
The ensuing tape, based on 2008, showing a fund-manager "bonus" rally into EOY.
|SPX 10-29 6M|
The January 1 Bradley turn would then introduce the larger wave 3 of A down here.
Keep an eye on the DJIA to see if and when it completes that broadening-top megaphone.