Trading in front of the Fed announcement is always difficult but it more random than usual this morning. Chile announced that is canceling the APEC Summit in Santiago in November. Trump and Xi were scheduled to meet at that time and that triggered sell algorithms.
The market bounced back very quickly as the reason for the cancellation appears to be due to concerns about security in Chile rather than anything political. The S&P 500 has already recovered all its losses but stocks are trading in very sloppy fashion while we await the 2 pm ET Fed announcement.
Breadth is running about 2600 gainers to 4100 decliners as traders are playing stronger defense and protecting gains. When trading in front of the Fed the focus must be much more defensive than offensive. Traders don't want to let losses build and they can't have much trust in new long buys with that news event.
I've been a net seller and don't plan on doing much until I see how the market reacts to the Fed. My 'Stock of the Week', which is a short of Wingstop (WING) , is working as the stock sold off quickly following a better than expected earnings report. The stock is expensive and the sector is out of favor which is why that trade is working.
One of my top picks right now is Recro Pharma (REPH) . REPH had an SEC filing yesterday that looks like it may be preparation for a spinoff that has been discussed. I suspect that spinoff may be announced on November 6 when earnings are released. The price action seems to support that speculation.