One last qualitative piece, for this month.

What to make of market reaction to the FOMC statement, and where will sentiment go from here? I don’t know. People in finance don’t say that enough. But we guess because we have to. Even inaction is an action, and we all would prefer to have our actions based on fact/knowledge/theory instead of chance. As Ken Arrow is fond of quoting,

“The Commanding General is well aware the forecasts are no good.  However, he needs them for planning purposes.”

Assessment

As was widely expected, the FOMC put out “language to calm the markets” (Close Out Your Shorts TODAY; Watch For Bernanke Put). I recommended short-covering on Monday based onrisk of a big upside move. With 210 Gainers for 310 Losers as I write this, I give myself only a passing ...