The market has recently been moving up nicely despite the tiresome fiscal-cliff debate, so it's a bit ironic that additional easing by the Fed announced today produced such rocky trading. The Fed actually went further with its money-printing program than many had anticipated, but the initial positive response eroded quickly during Ben Bernanke's press conference as some of the thornier issues still facing the Fed came to the forefront.
The general view is that the Fed doesn't have much ammunition left and each new quantitative easing program is having less and less of an impact. We saw after the last QE round that the market lost momentum very quickly, and many traders are anticipating that to occur again.
Today's Fed games are going to be quickly forgotten and we are going to return to the fiscal-cliff vigil. That is the only thing that is going to matter into the end of the year and it probably doesn't pay to overthink it. If there's deal before Christmas, the market will rally hard; if there isn't, we will see very nervous trading.
That doesn't mean it's easy to pick stocks -- especially with such tepid momentum -- but it is going to be very tough to be too bearish other than in the very short term. We may get a bit more downside follow-through in the near term, but I expect to see support kick in fast.
Have a good evening. I'll see you tomorrow.