Greetings from Las Vegas, land of entertainers you had no idea were still alive. Local casinos were probably giving better odds than Wall Street today as the market underwent several swings around the Fed announcement, rallied hard, and then totally cratered in the last 10 minutes. A commenter on another blog quoted CNBC as reporting that a half million mini-spoos were traded in the last 15 minutes of the regular session. If true, we can likely blame the late-day smashing on an aggressive hedger or perhaps even manipulation, though I think the latter explanation is less likely. It doesn't really matter. This mid-term rally is going to be laden with nasty swings to keep weak hands on the wrong side of the market.
Along those lines, I believe the 3%, 10-minute slump will be erased very soon, but don't be surprised if we gap lower on tomorrow's open just to finish shaking the tree. I will be looking to fade that gap if it occurs. As described yesterday, the odds are now highly in favor of an intermediate-term rally, and I'm going to trade from that standpoint until proven otherwise.
Some of my more aggressive longs may come in the form of precious metals. The dollar cracked hard today, which is exactly what we should be seeing in conjunction with the aforementioned rally. The buck's slump should continue and would help PMs and other commodities work off extreme oversold conditions. The fact that the Fed is now pumping fresh dollars left and right certainly puts the wind at the backs of the metals.