Seriously renewed carnage - likely lies in-wait for market's, although there are a few possibilities suggesting the more-dire aspects on-hold into early 2016. Of course that's not a lock, as we're in for a spate of 'wild volatility' immediately, as both bull and bear alike will agree for the 'wake' of the FOMC's most-awaited if overplayed decision in years. 

The Federal Reserve has had a great deal of difficulty sorting the divergence or varying states (and even within segments) of the economy versus the corporate sector, as what the Fed's assist to facilitating funding primarily to do buybacks, has done 'to' shareholders (rather than 'for', beyond the short-term benefits of buybacks earlier this year). That alone is a structure that won't dominate 2016; so combine the waning buybacks with snugged-up policy; that's not bullish.

This Fed 'must' worry about financial markets even if not an official mandate; of course because their overstayed expansive policies slowed recovery (counter a perception of lifting all boats), drained capital from productive use, and pressed an entire generation of Senior Citizens into chasing yield rather than conserving funds and avoiding increased risk burdens which they (sometimes inadvertently if they don't understand the downside of strictly pursuing yield) took on.

The danger for the Fed might be that (for much of the Nation) the economy on the surface looks sort of OK (like NY and San Francisco for instance); while at the same time multiple maintenance would require faster growth that's not yet in the cards, and is actually throttled by our forecast stronger Dollar overall (at the same time interim consolidations, not declines of substance, occur).

While a weaker Euro helps Europe get on its feet despite the incredible debate about a preservation of national borders versus Southern EU 'ring-fence' border control and various social disintermediations humanitarian but dangerous open refugee policies has brought (Europe had these problems already; but control in a sense has been lost by the numbers already inserted but not assimilated in a majority of larger EU member states). The firmer policies distance immigrants to degrees from general populations, but governments must try regaining some control or semblance of order from this partially intended invasion .. because IS likely knew and planned for their brutality to push people into Europe, with their efforts to infiltrate terrorists not just those vulnerable to radicalization as well.

Daily action - be careful what you wish for, as you might get it. That sure was my reaction this morning to the 'gap-up' S&P opening; after 'hoping' last night to see a rally so we could again fade the market from higher (less risky) levels. I'm vehemently skeptical of shorting any weakness and thus in-anticipation of really significant renewed risk, especially once we're into 2016, we'd be a bit more 'at ease' if the S&P were to move up as much as possible going into what might in fact become a 'brick-wall of resistance'. We don't know that it will do that, but if it works out that way, prospects for initiating new short-sales will be lower risk. 

In the meantime, we had a partial very profitable exit from the March S&P short from 2057-58 at approximately the 2030 level with that gap-up. Noteable, then we layered back-on a bit at the 2043-44 area. Rather than describe (because it slightly bettered the overall posture) it as an 'average' short from 2060; we just divided it into a partial retention from 2057-58 (position posture inflection for all that by today were completely out); and then an overnight trading guideline that is short from 2043, but the last few minutes (after the NY Bell) spiked it a bit to 2037. We simply have a break-even mental stop on that at 2043 for the start of Wednesday. Again this is impossible to define for everyone; but you've got the general idea of how we harvest gains on a short and then keep some on-board and look for more rallies to fade into. In this case 'lightly', due to the FOMC etc. 

By the way; remember we're going into 'year 3' of my forecast Dollar rally; from a time when (in the 79-80 area of the Dollar Index) few concurred that the Fed, in fact, was already starting to toy with the idea of backing-off their excessive neuvo-Keynesian policies. The majority of professionals call for a soft Dollar, as they have for years; and they're wrong. But it won't always be that way, which is why I warned about the 'crowded trade' of being long at these high levels, even as I believe the Dollar's going a bit higher and the Euro a bit lower, for now. We have no justification to hike rates but they likely will; and that's not a 'ringing of a Bell' for the end of the Dollar's run; but it's mostly behind; again too crowded.

Again; none of this means the Dollar won't move higher; it means it's late in the game and we've nailed this currency market for years so hard to rationalize the idea that anyone coming long into the Dollar now or short on the Euro really is figuring out much, even though those trends should persist awhile longer. (New members should know that while bullish on the Dollar from 79; we were bearish on the Euro since 1.38-1.40 expected all these lower levels; eventually even a move under 1.10, with a possible challenge to parity. The latter hasn't quite yet happened; but remains on the menu for 2016. Now it matters more for trades and travels, not for taking a long-term FX position is my point.