"Well now they've done it Ollie"

Talk about a buzz kill.

The FOMC announcement and reaction went about as expected with high anxiety and volatility in both directions. Since there was a selloff on Tuesday at the close, the typical response as I indicated would be for there to be a rally today....then the FED did it again.

After giving typical uninspired comments with the 25 basis point rate cut they completely sucker punched the markets with their release of their new discount fund access program this morning..... Traders were confused by the Fed and why they did not make the credit access plan announcement yesterday

If they had done it at the same time as the Tuesday meeting announcement it would not have been a problem, but done this way started a feeding frenzy that saw first a 271 point rally in the first 20 minutes followed by a 400 point drop before settling out at a modest 40+ point close on the DOW.

Adding to the frenzy was the announcement by major banks that they may have more debt than originally expressed...big surprise to no one, but it was the excuse needed to drop the DOW 180 points in less than 10 minutes.

The result is that traders feel real schizophrenia and talking heads spent most of the day doing double takes at each other trying to come up with words to express what it all means.

What it means is that we have closed below our serious support-now-resistance line of 1492 on the SP500. We need to close above that line tomorrow and we cannot close below 1477.65 or traders are not going to trust this market.

Now as I said, after 1000 point rise in 10 days it would be expected to see a retracement, but we don't want to continue to see this erode. Psychologically this is the strongest time of the year and so far everything has gone as programmed, but when panic and distrust set in it can set short term counterforces into effect.

This is not a time to start dumping stuff, but keep a weather eye out and I will be on throughout the day tomorrow on MarketWatch LIVE! to keep you abreast of my short term observations...