The Fed cut monthly QE by $10bn, and after a very brief drop..the market soars...breaking into the sp'1800s, with the VIX getting smashed into the low 14s. Baring an equally bizarre swing to the downside into the close...equity bears are once again...nuked.
Lets get this clear..I was entirely wrong with my QE no-taper outlook until the spring call.
I am indeed very surprised.
However, what I am not surprised at is the reaction of the market. With uncertainty out of the way, the market is soaring...after all..annual QE is still $900bn a year.
Bears face HEAVY QE-pomo tomorrow and Friday...and a weekly close in the 1820s is now very viable.
updates into the close....
3.14pm... market breaks new highs..in sp'1803s.
I think we have clarity now on the rest of the year...and arguably..the next 4-5 months.
Target for this grand up wave is sp'1950/2050.
3.29pm...the only issue now is whether the VIX closes in the low 14s..or 13s. Which is one hell of a drop from the mid 16s earlier today.
A lot of good bear traders just got nuked today...some won't make it out alive today.
3.42pm..Bernanke concludes..for the last time.
Market soaring to new highs....incredible...but not unexpected.
No fear.. into 2014.