Every month we hear folks say that this is the most important (insert indicator or meeting here). But it does seem that tomorrow's Federal Open Market Committee meeting is consequential. I believe consensus is now that the Fed will hike by a quarter percentage point.
Quite frankly, I would love to see the Fed shake things up and give the market a rest. Why? The Nasdaq has now been green for six of the last seven trading days and the Dow Jones industrial average is at resistance. Also, the S&P 500 is at that round number of 4000 -- not to mention, the underside of the 50-day moving average. But if the Fed does stir up the market, it is unlikely to change my view that we would then rally again.
At least the market's breadth was better on Tuesday than it was during Monday's rally. It was the best breadth in weeks. But it still wasn't enough to halt the decline in the McClellan Summation Index. That would require net breadth on the New York Stock Exchange to be positive 700 on Wednesday. So it's within spitting distance of seeing a change, but it hasn't done so yet.

Away from that there was very little change in terms of the indicators. I do want to note that the ratio of the small caps to the large caps -- as seen in the Russell 2000 fund (IWM) to the the S&P 500 fund (SPY) -- did tick up nicely. Recall that I highlighted this at the blue arrow as bearish, so I'll consider Tuesday's tick up a minor change. It obviously needs some follow-through to believe it is more than a one-day blip.
The other ratio to keep your eyes on is the PHLX Semiconductor Sector index -- SOX -- to Nasdaq. It's been trending upward, but Tuesday saw it turn south. That is unusual, considering tech had a pretty good day in the market and has been leading. Maybe it was just that the most oversold groups (banks and energy) got all the love on Tuesday, but it is something to pay attention to.
The market has had a nice run in the last week and we can even see it on the chart of the Overbought/Oversold Oscillator now, something we didn't see before. As you can see the market is still oversold so if we do see the market pull back based on something the Fed says or does I would still think we're oversold enough to see another rally.

The real question is if sentiment has shifted. I would say it has brought the bulls who were under their desks last week back out. But I'm not sure we have seen any bears yet converted. It would likely take a comment (or action, but more likely a comment) by the Fed or Chair Jerome Powell to change some views. With the rally so concentrated in tech stocks, I find it fascinating that the same folks who loved the market in 2021 when tech stocks were the only game in town, are not so keen that they are the only game in town now.