U.S. equity futures markets have firmed a little since last night, but are still trading slightly lower a little more than three hours ahead of the day session opening.

On traders' minds this morning is a U.S. housing report which is expected to show the market remains fragile, a sign that the economy is slowing. Trading could be muted today in the equity markets ahead of this afternoon's Federal Open Market Committee decision.

Although the Fed is expected to keep its benchmark rate at between zero and 0.25 percent at today's FOMC meeting, traders are still nervous about what the language of the committee's statement will contain.

Here is what I expect the Fed to say:

• The pace of recovery in output and employment has slowed in recent months.
• Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.
• Employers remain reluctant to add to payrolls.
• Inflation is likely to be subdued for some time.
• Interest rates are expected to remain unchanged and at exceptionally low levels for an extended period.
• The Federal Reserve's holdings of securities will be kept at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.

I don't expect the Fed to play with its balance sheet. Look for it to say that it will continue to monitor the economy and act accordingly in the future if it deems the economy needs a boost. In other words, it will not increase the amount of its bond purchases.

Stocks are expected to continue to rise if the Fed decision remains the same. Look for the December E-mini S&P 500 to continue to remain strong. Now that it has broken out of its trading range, the top of the range at 1124.50 is the new support. If this area fails, then look for a hard break to 1104.50. On the upside, however, the chart indicates there is plenty of room to continue to rally. 1157.00 and 1160.75 are two potential upside targets. This gives you an idea of how much room this market has to rally if the conditions remain bullish.

December Treasury Bonds are trading in a tight range but making a move on the chart which indicates a slightly bullish tone ahead of this morning's housing number and this afternoon's FOMC decision. A bearish housing starts report should drive T-Bonds higher.

Technically, the T-Bonds are breaking out over a downtrending Gann angle from the 135'19 high at 130'27 today. Short-term traders should look for a test of the retracement zone at 131'09 to 131'24.

A dovish tone from the Fed this afternoon could trigger an even further move to the upside especially if the FOMC hints toward additional T-Bond purchases before the end of the year. This news can trigger an acceleration to a major retracement zone at 132'12 to 133'04.