No Direction Ahead of the Fed

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheLFB-Forex) -- Global markets could send equity and commodity values higher, in a near-term oversold bounce that will run into huge daily chart resistance areas. The FOMC U.S. rate decision and statement will be absorbed, with attention paid to the outlooks for growth and expansion. Interest rate market activity is clearly signaling inter-bank chaos and government financing disorder; central bankers may have their work cut out containing the expectancy of what they are actually able to achieve.

Investors need to maintain a near-term outlook as the unfolding debt story develops and opinions are formed. Cash is king for those without a tried and tested plan and access to 24-hour futures markets that can navigate swings in global trading momentum. Any open positions, in any market, will run the risk of massive volatility as the Federal Reserve'swords of wisdom are analyzed.

It is little wonder that the market cannot generate much interest in moving prices in either direction for any length of time, when finding fair value is as elusive for those only trading the cash market cycles. Investors with long-term outlooks are left to pick through the ruble of daily trade, looking for set-ups that can actually hold a test of the previous session high or low; meanwhile traders get in, get out and start looking again in short periods of time.

Forget year-end targets and main stream media talk of the recession ending in 2012; the reality seems to be that most analysts would stand as much chance of pinning the tail on the donkey as they would getting the Friday closing number on the S&P, with the amount of intra-day volatility to contend with. Calling for the bottom or the top of the most savage of global financial meltdowns seen in the new generation of algorithm-based trading arena is folly.

This is a traders' market built for reactive, contrarian thinkers who are prepared to take a shot when the links that drive futures and forex values start to move, and in general that is not during prime U.S. broadcast time. Trading the trough phase of a business cycle leads to most daily moves of note happening at 2 am-3 am and 6 am-7 am ET each day in reaction to the European open and then the Chicago futures market re-aligning to overseas trade.