...A rally, is the historic pattern. Markets have typically handicapped Fed rhetoric to be more dovish into the meeting or have been successfully guided down in their expectations from the Fed thus also setting a glide path into a 2pm announcement on Fed Day.

Un_dollar_usThe "Taper" period recently begun has somewhat changed the "blue sky" market tone for last few meetings versus the longer term trend discussed.

FOMC days have been down days ON THE DAY every meeting in 2014 and down 7 of last 10 meetings.  But if Fed delivers a surprise, the rallies have been BIG.  

What does the Fed mean for the Dollar (UUP, quote)?  If you were the DXY bull (which we have been) in 2014 on the Fed, you have seen a rally every meeting this year.  The set up into tomorrow on the DXY remains as constructive as any.  The DXY is in the low end of a defined range bottom near 79.30.  With recent Fed rhetoric slightly misunderstood on the hawkish nature of the tone, we expect more of the same despite no expectation of language change.  

Own the DXY to 80.50.  CRB will struggle for the next couple days before resuming its ascent.

By the way, today is another up Tuesday bringing the YTD performance of the SPX to +9.4%.  This all makes the Fed move slightly more pressured after the bullish tone of the Tuesdays when the Fed rolls in at 2pm on a Wednesday.

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