I could not make heads or tails of yesterday's action, pre or post Fed. In the morning we had some wild convulsions before the market headed upward anticipating some magic pill from the Fed. Then when the Fed announced their policy and economic assessment we immediately saw the S&P 500 swoon, before a fantastic late day rally that had shorts running for cover as the HFT computers went ballistic. Some days there is just no takeaway, and yesterday was one of those.
This morning it is back to ugly as we've given away a good 75% of yesterday's gains thus far, and are not far off from Monday's ugly closing level. It still does not feel like we've found a bottom - yesterday seems to be just an excuse to work off some of the historic oversold conditions. That said, its so whippy now it's just nearly impossible to trade the indexes as we're seeing the S&P 500 moving in 10 point increments as if they were 1 point increments. Speaking of, in the time it took me to type this - we've moved 10 S&P points back up.
p.s. I've mentioned France as a wildcard for over a year, and stressed it again the past two weeks. SocGen (a huge bank in France) has seen its stock take a big hit today, as its books are obviously full of French debt. We have seen (finally) some separation between France and Germany in terms of how the market approaches it debt, whereas for the past few years they have traded together. I will continue to point to French debt as a massive risk in the system. At some point one wonders where all the money for the ESFS is going to come from.