While doing what is expected can be a good thing, it can also backfire, especially when Wall Street is clamoring for a serious assist from the Fed to boost the ailing economy one more time.

Well, that did not happen, and disappointment set in pulling the rug out from any early upward momentum. As the chart from MarketWatch.com above shows, we closed at the lows of the day, which may invite more selling tomorrow.

The Fed’s Operation Twist is designed to keep long-term rates low hoping/wishing to jumpstart the economy. The FOMC in its notes remarked that economic weakness has continued, unemployment remains high and housing is a disaster. Also, further downside risks to the economy remain while global financial markets are strained.

While that is really nothing new, it makes it official and traders on Wall Street did not like it one bit, and selling accelerated during the last hour.

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If you were a bull, you must have been excited to watch the rally unfold as all major market ETFs gained strongly.

But, what starts well does not always end well. This was the case today, as the morning rebound succumbed to profit taking in the afternoon in anticipation of what the Fed might announce tomorrow.

Will it be the widely anticipated “operation twist” to attempt to pull the economy out of the doldrums? In case you missed it, operation twist involves the Fed selling short-term assets and reinvesting the proceeds to buy longer term durations with the goal of limiting pressure on long-term rates.

Or, will they go all out with some type of shock-and-awe effect? If they do, there is a good chance that the markets will react positively; if they don’t, you might just see a sell-off as disappointment is sure to spread.

Not helping the rebound in the afternoon were news reports questioning as to whether Greece might get a short-term injection of cash to prevent a default on its bonds.

It’s uncertainty and rumors all of the time. Let’s hope the Fed’s action, or lack thereof, can give us some clue as to the major direction of the market. If not, we may be stuck in this trading range for a while longer.

After last week’s sharp rebound, equity ETFs were not only overbought, but also ‘over-hoped,’ as one trader put it.

Concerns about a Greek default sooner rather than later, due to lack of a new austerity plan, pulled the markets lower right at the opening as selling accelerated. It looked pretty ugly for a while as several attempts to swing higher failed until the last hour of trading.

That’s when news surfaced that the Troika gang (IMF, ECB and EU) was engaged in positive talks with Greece (details unknown), which gave the major indexes a lift and cut down prior losses in half.

It’s hard to say whether the alleged progress of the Troika is for real or just another patch-up job attempting to avoid the unavoidable.

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