One of my volume indicators shows distribution in Research In Motion (RIMM) yesterday and today.

RIMM - Daily Chart

In his morning note, David Rosenberg mentioned that Canadian retail sales were weaker than expected.

“Consensus was at +0.7% MoM on the headline and +0.2% MoM excluding auto sales. Instead what we got was -0.6% MoM on the former an -0.8% on the latter.

A 3.4% MoM plunge in gasoline receipts (price related) was partly but not wholly to blame. Excluding gasoline, retail sales were basically flat on the month.

In terms of areas of strength, building supplies rose 1.0% and were up in three of the past four months (feeding into the housing frenzy). Pharmacies posted a 1.1% advance and this was the third sizable increase in a row.

But that was about it. Clothing sales fell 0.5% and furniture/electronics slipped 0.6%. Total automotive sales slipped 1.0%. Supermarkets registered a huge 1.6% decline too. Books/hobbies/music stores were flat on the month.”

I factored this into my short RIMM thesis. Research In Motion (RIMM) will report earnings after the close Thursday September 24.

The cash S&P 500 index closed lower by 1% or -10.79 points. The highlighted line in the chart below is the 15 minutes between 2:15 and 2:30 EST; The time of the fed announcement.

S&P Futures - 15 Minute

Initially the market traded higher, but the move was faded by the smart money. By 2:45 EST the market was on it’s way lower and sold off until the final 15 minutes.

Rates were expected to remain on hold at 25 bps and as widely expected the fed did not move the funds rate. There has been talk of the fed starting to reign in some of their easy money stance, and it was confirmed that the spigot will be tightened a bit. MBS purchases by the NY Fed will be smaller and not as frequent.

From what I could tell, the S&P traded lower on strength in the dollar. I continue to think a move higher in the USD will catch the majority off guard. If this happens, I am positioned to benefit.

As the dollar gained strength, and the S&P traded lower and the $VIX strengthened. In credit spreads, high yield and investment grade both closed at their respective wides of the day.

Volatility Index - VIX - 15 Minute

The intensity of the selling picked up today on the NYSE. Down volume was just about 76% of the total up/down volume.

I’ll be back at 9:30 AM EST or 6:30 AM PST.

Wherever I am, I will be there. And the beat will go on.

After the FOMC announcement, the Dollar initially traded lower. It has since recovered.

USD

Notes:

The Fed will maintain the size of the $1.25T MBS and $200B agency purchases but will taper them out through the end of March.

“…that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

repeats that they will:

“Continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets”

and

“The size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.”