I guess it was time to short :) - S&P500 drops nearly 3% - on Fed annoucement - September 21 2011

Two days ago I warned that "We are coming to a definitive point in the markets" in the post :
Time to short S&P 500 ? Depends on Fed Meeting Wednesday 

Evidently it was time to short as the Fed announcement disappointed the markets as the "Operations Twist" was already priced into the markets and then some.  It appears Big Ben realized that further asset outright purchases would elevate commodities (ie gold) to levels that are unthinkable and with that inflation creep which has already started to occur.

It has been commented on many websites that until the S&P 500 gets to the 950-1000 range QE3 will be unlikely. 

We will see if the range will be broken sharply tomorrow, the selling continues expect that 1000 much sooner that most people think.  October might be a "typical" October where markets get reacquainted with economic reality.

SourceFire - Stock Charts - September 20, 2011

Thought it would be interesting to have a look at SourceFire.

From Wikipedia:

Sourcefire was founded in 2001 by Martin Roesch, the creator of Snort. The company created a commercial version of the popular Snort software: the Sourcefire 3D System, an intrusion prevention solution. Sourcefire states that it is committed to advancing open source technology and continues to maintain close ties with the Snort user community.

Company mission from their website:

Focused on its mission to be the leader in intelligent cybersecurity solutions, Sourcefire® is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. With solutions from the network to the endpoint, Sourcefire provides customers with Agile Security™ that is as dynamic as the real world it protects and the attackers against which it defends

 Weekly chart

The company has shown relative strength company to the broad S&P500 / Nasdaq Indices.
As seen below, FIRE has appreciated faster than the general indices.

Another notable divergence is more recently.  August was a terrible month for NASDAQ and S&P500, however SourceFire emerged unscathed which shows relative strength. 

Time to short S&P 500 ? Depends on Fed Meeting Wednesday

We are coming to a definitive point in the markets.  The Fed will be announcing its meeting Wednesday, which will really set the pace of the next 3-6 months.  The chart below shows also a short signal.... Slow stochastic is getting into overbought territory and the 50 day MA resistance is right above the current price.  A touch of this level at 1226 could be an optimial short entry with a tight stop above this level.  If the Fed disappoints the market, look out below, however there has been talks the FED announcing some form of stimulus which is not priced into the market (ie surprise).