For the glass half-full crowd, the Dow closed down 250 points, which was at least better than the -286 points level where the Dow stood with about an hour to go before the close.  Continuing that theme, on a month-over-month basis the Dow actually escaped the dreaded month of October by remaining unchanged on the month with a tiny 5 point loss.

For the glass half-empty crowd, the close on the day wiped out all of yesterday’s rebound and then some.  The S&P closed at 1036, which was below the 50-day moving average and below a key support level of 1042.  The Dow closed even on the month but down 3.8% from the high during the month.  The S&P and NADAQ both closed lower on the month and down over 6% from their highs of the month.

So what happened today?  Nothing really.  In the post below I talked about a game being played by big speculators with big computers.  Yesterday the programs all said buy and today sell.  The only news today was that the employment component of the Chicago ISM index fell, but that certainly wasn’t the reason for the sell-off today — any more than the GDP report was the reason the markets rose yesterday.

But before you get totally comfortable expecting the stock market to continue to sell off, remember that just yesterday traders were certain that stocks would continue to rally. What happens one day has no bearing on what might happen the next.

Looking ahead to next week and the FOMC announcement, the stakes are higher than they have been for months when it comes to the wording of the statement release.  Should the Fed change the wording of the statement to indicate that some sort of plan to withdraw monetary stimulus is under consideration, then that would send a strong message to the currency markets.  The dollar should rally sharply, and that would put immediate downward pressure on stocks.  Conversely, no indication of a shift away from “low rates for an extended period of time” policy would be an all clear signal for traders to resume dollar-bashing and stock buying.

Of course as soon as the FOMC meeting is out of the way, we’ll be staring down the barrel of the next Nonfarm Payroll number.  Should be a fun week.