Equities players are taking a big step back from the U.S. indices ahead of this afternoon’s FED Interest Rate Announcement. For the first hour of trade, the DJIA (-100), S&P 500 SPX (-10), and NASDAQ (-10) have fallen into the red. Although the expected tone of today’s FED engagement is dovish, investors have decided to limit exposure ahead of the release.

Aside from this afternoon’s action, not much is on the economic calendar for the U.S. session. A bit earlier, MBA Mortgage Applications (March 11) came in beneath February’s numbers at 1.6%. While not an overly robust figure, MBA applications remain in positive territory ahead of the North American spring home selling season.

A Dovish FED Isn’t Helping Today’s Stock Market Action

At least during the early going, the picture facing the U.S. indices is decisively bearish. The past 24 hours have been dominated by stock sellers. Subsequently, June E-mini DOW futures have fallen beneath daily support.

Here are the levels to watch for the remainder of the U.S. session:

• Resistance(1): Daily SMA, 25891
• Support(1): Bollinger MP, 25678

Overview: Today’s bearish sentiment has sent both the DJIA and June E-mini DOW beneath the 26,000 handle. While significant in the short-term, the correction of the past day is by no means earth-shattering. These markets are still very much in bullish territory.

As stated earlier, pretty much everyone expects the FED to stand pat on rates. The tone of today’s statement will likely be dovish, preaching “flexibility” and “patience” regarding further tightening. However, the FOMC Economic Projections report may bring a few surprises to the table. Monetary policy and U.S. economic estimates for the next 2 years will be addressed. In the event their views suggest a slowing economy and flexible FED policy, be on the lookout for further bearish action in the indices.