Vulnerability increases irrespective of the upcoming (and short-term key) Bank of Japan and then FOMC meetings, by virtue of the Oil and Apple-led recent rallies that eliminate an hourly oversold; allow shorts to get run-in; and invite institutions to lighten-up on rallies (which accounts for the lack of sustainability by the rebounds).

If anything, the Monday market, besides being on hold ahead of the central bankers at midweek, reflects the jittery low-liquidity of this market with alternating moves. It's against that backdrop that we minimize our often-pertinent economic focus, given it is so clearly a market on tenterhooks 'waiting for Godot' (the BoJ even more than a recalcitrant Fed) starting late Tuesday night US time (Wed. morning Tokyo time).

If the BoJ does inject substantially more money it will be viewed as simply pouring gasoline on a fire, and you'll likely get the Dollar's move above 96 we've talked of a bit; with the expected 'consolidation' before moving higher after the nominal goal hit last week. If Tokyo does restrain itself, the message will be one of 'sober revisionist' thinking about helicopter money, and indeed telegraph the prospect of a potentially stricter Fed as well (since it's presumed the major central banks collude in a way; with China sort of odd-bank-out, if you will). 

Regardless how this goes we suspect the S&P will try to confound the simplicity of a majority of pundits that anticipate we simply drop an immediate 5-10% if they do hike; and soar by such an amount if they don't. Hardly. In the case of the former we would concur with the downside (or more); but not rewarding those reactive just in the wake of the move. Rather we'd think they run-in those shorting weakness soon thereafter, and that sets up the real McCoy on the downside as the process evolves of course. In the case of the latter (no move); you get a relief rally; but then pundits will postulate that a December move is essentially a given; and that rally will falter.

Bottom line: either way the Fed goes we expect negative price behavior, with very violent thrashing around (a macro version of what was seen intraday Monday) that's quite likely to land the S&P at considerably lower levels; perhaps in a short timeline.

For now we hold short Dec. S&P from around 2180.