Tuesday’s stock market rally was misleading since breadth measures revealed a 3-1 advance decline.

This in turn led the trusty McClellan Oscillator (NYMO) to approach a -100 reading. In the 40 years I’ve been involved with markets this type of reading has always produced a short squeeze rally. The same oversold conditions were seen Tuesday for crude oil when record short interest was recorded. Throw-in some commentary and hints the Fed would do very little in the way of interest rate hikes and voila! we have a sizable rally.

I’m still going to keep commentary brief until after the Fed announcement and possibly into Friday’s options expiration. On this occasion there’s a very large $1.1 trillion, one of the largest in years, with $670 billion are put options with strike prices of which $215Bn are struck relatively close below the market level, between 1900 and 2050.

This is protection against an abrupt loss of confidence investors have in Fed polices released 2 days prior. Remember, this is a market that over the past few months is more driven by algos, programs and HFTs than usual. So I’ll keep my powder dry thank you very much!

Oh, did I happen to mention all three economic reports (CPI, Empire State Mfg Survey and Homebuilders Confidence) were all negative today? I guess this doesn’t matter to the Fed and “see no evil” followers who believe everything about the economy is awesome.

Market sectors moving higher included: Most everything with a ticker symbol.

Market sectors moving lower included: Volatility (VIX), Treasury Bonds (TLT), Brazil (EWZ), Japan (EWJ), Euro (FXE), Yen (FXY), Swiss Franc (FXF), Aussie Dollar (FXA), Natural Gas (UNG), Copper (JJC) and handful of others.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume remains heavy and will likely remain that way this week. Breadth per the WSJ was positive.