Well, it happened again yesterday.  The equity market allowed itself to get fired up about Greece receiving an 8 bln euro tranche of bailout funds only to get burned late in the session by a headline indicating the troika will complete its review of Greece in October.  In other words, nothing is guaranteed yet on the bailout front.

This sobering reality wiped out what had been a good day for the major averages.  The S&P 500, which was up 1.4% at its highs for the day, ended the session with a 0.2% loss. 

Tuesday's performance was a complete reversal of Monday's action, when the major averages sold off early on concerns about Greece and then cut their losses substantially when a headline (what else?) hit that Greece was close to receiving aid.

Greece is the word alright. It's got a groove, it's got a meaning. Greece is the time, is the place, is the motion. Greece is the way we are feeling.  This is a life of illusion, a life of control.  Mixed with confusion -- what're we doin' here?

You better shape up, Greece, because the market needs a plan and its heart is set on you.  In fact, more often than not these days, it is hopelessly devoted to you.

Today, though, the market is going to be hopefully devoted to Ben Bernanke and the Federal Reserve, even if some cantankerous Republican leaders are not (more on that in a minute).

The FOMC will conclude its two-day policy meeting today and a new policy directive will be issued at 2:15 p.m. ET. 

It is widely expected that the FOMC will announce a plan to extend the duration of its portfolio of Treasury securities by either reinvesting the principal portion of maturing mortgage securities into longer-dated Treasury securities or perhaps by selling short-term Treasury securities and buying longer-dated Treasury securities.

The aim in either case would be to hold down long-term interest rates in order to stimulate borrowing and investment.  This approach has been dubbed "Operation Twist" and, importantly, it has already been deemed by many to be something that will prove ineffective considering long-term rates are already extremely low.

Notwithstanding the latter thought, doing nothing today would be completely unexpected and a disappointment for the market. 

We suspect the Fed is well aware of what the market is thinking, which is why we wouldn't rule out the possibility of the Fed providing some kind of twist in its directive.  This is admittedly a low probability, but if the Fed wants to pack some policy punch today because it thinks Congress is reluctant to fight for fiscal stimulus, it will do something that is unexpected.

Knowing a weak housing market is the bane of many people's financial existence right now, and that Mr. Bernanke spent some time dwelling on this fact in his speech at Jackson Hole, some policy effort geared toward stimulating mortgage lending might be an answer here.

We'll know soon enough what the FOMC is thinking.

Regrettably, we know what the Republican leadership is thinking.  They want the Fed to do nothing and they said as much in a letter sent to the Federal Reserve. 

Everyone is entitled to their opinion of course, but this passive-aggressive approach is worrisome as it stomps on the idea of the Federal Reserve being an independent body.  Not a good thing.

On a better note, both Oracle (ORCL) and Adobe Systems (ADBE) posted better-than-expected earnings results for their fiscal quarters ending in August and offered fairly reassuring guidance.  Microsoft (MSFT), meanwhile, announced a 25% increase in its quarterly dividend to $0.20 per share.

These are all good things on a micro level, but they are not resonating much for a market fixated on the macro at this point.  The S&P futures are pointing to a flat start for the cash market.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.