Today’s Fed announcement will be interesting.

As I wrote recently, while it’s no secret that the U.S. Central Bank is ultra-sensitive to the stock market, they’ve lately been receiving some much-deserved, and inexcusably-overdue heat over blowing up the greatest equity market bubble in nearly a century.

So, while this morning’s selloff, if it holds till 11am pac time, may gauge the Fed Chairman’s language (he’ll not want to pour any gasoline onto this morning’s tiny spark), I wonder if he won’t be a tiny bit less dovish in light of the glaring reality that he and his predecessors are chiefly to blame (or credit, depending on what you’re after) for the precariousness of the present equity market setup…

Asian equities were mixed overnight, with half of the 16 markets we track closing lower.

Europe’s a mess this morning, with all of the 19 bourses we track in the red — most by in excess of 2%.

U.S. major averages are faring a bit better than Europe: Dow’s down 424 points (1.39%), SP500’s down 1.45%, SP500 Equal Weight’s down 1.72%, Nasdaq’s down 1.24% (Microsoft is softening the blow), Russell 2000 down 1.63%.

The VIX (SP500 i.v.) sits at a problematic 26.93 (up 16.85%). VXN (Nasdaq 100 i.v.) is up 7.33%.

Oil futures are down 0.78%, gold’s down 0.43%, silver’s down 1.03%, copper futures are down 1.80% and the ag complex is down 0.30%.

The 10-year treasury is up (yield down) and the dollar is up a big 0.66%… Recall my volumes of commentary the past few months about how a stronger dollar is hell on what the Fed aims to accomplish (and, thus, on the markets as well).

Oil services and AT&T are our only two positions in the green this morning, the rest are led lower by Eurozone equities, materials, healthcare, banks and Asia-Pac equities; our core mix is off 1.25% to start the day.

Think on this from the market technician’s bible, Technical Analysis of the Financial Markets by John Murphy:

“The problem is that the charts and fundamentals are often in conflict with each other. Usually at the beginning of important market moves, the fundamentals do not explain or support what the market seems to be doing. It is at these critical times in the trend that these two approaches seem to differ the most. Usually they come back into sync at some point, but often too late for the trader to act.”

Have a nice day!
Marty