Other headlines in focus include earnings from Oracle, rising mortgage applications, the OECD raises its outlook for the first time in two years, a government watchdog wants a new government agency to protect consumers from banks, and Citigroup plans to raise base salaries as much as 50% to compensate for reduced bonuses.

Premarket gainers: MGM, STX, OCLS, NCS, AIB, NM, FRZ, HST, EDC, AM, CTIC, CLNE, STSI, USU, AGEN, PETM, CYBX, SOL, AAUK, ORCL, PALM, APWR, DRYS, RIMM, OREX, AVAV, BCS, TS, C, MT, NOK, SONC, & ESLR.

Premarket losers: ZRAN, LYG, PQ, AGP, SVU, EDZ, RT, FXP, OI, EEV, SRS, SMN, TPX, TZA, FAZ, STI, OSIR, ROY, WFR, JBL, DRI, HLIT, AGP, SNY, & BGZ.

At 10:AM we have the New Home Sales report, at 10:30 the weekly oil inventories, and at 2:15 the FOMC announcement.

There's a belief that if we're going to get a reversal, the Fed will be the catalyst as they try to reassure the market that the punchbowl of easy money will not be taken away anytime soon, that the economy is recovering, and that inflation is of little concern. In other words, the Fed is expected to tell the market exactly what it so much wants to hear.

Keep in mind that when the S&P gaps up greater than +0.5% on a Fed day, it has closed greater than the open 10 out of 11 times for an average of +1.2% according to Jason Goepfert. Unfortunately, the gains produced on Fed days often are reversed the following day. For what it is worth, I am seeing some selling within the leveraged bearish ETFs in premarket trading, so it appears that at least some bears are fearful of the Fed as oversold conditions remain in place.

Have a great Fed day!