Get excited, because one of the most highly anticipated events for the market is finally here. On Wednesday, the Federal Reserve will finally answer the question that has long consumed the thoughts of investors worldwide: Will the Fed announce a tapering of its quantitative easing program in September?
Whether it announces a large taper, a small taper or no taper at all, the Fed's decision will have a tremendous impact on how the S&P 500 trades (and the S&P e-mini futures alongside it). So, keeping in mind that most analysts and traders believe that a taper in the range of $5 billion to $15 billion is priced in, let's analyze how the market will respond to four possible scenarios.
(Read more: Whatever the Fed does, gold will rally: Schiff)
A slightly bigger taper, in the ballpark of $15 billion to $20 billion, would cause a short-term correction. In this case, the S&P September e-mini futures would likely fall to major support at 1,681.