Warren Buffet has made the market analogy of Mr. Market being a bipolar entity. An over exuberant personality who then changes to overly depressed and pessimistic.
Another analogy would be of Dr. Jekyll and Mr. Hyde. In a market that most agree is the product of low interest rates and easy money I would contend that the momentum and thus the outlook of the markets in general can change on a dime if Dr. Jekyll thinks for a moment that he will not get his fix.
Today the US Fed released it's statement. They said nothing new and reiterated their intent to keep on doing what they have been doing for months. Buying govt. treasuries in the same amounts.....
The knee jerk reaction of the stock market was up. "Yippee! The easy money will continue".
And then selling came in.
My impression of the situation was that some big stock holders were looking for an opportunity to unload some long stock and the heavy buy volume was just what the Dr. ordered.
A market doesn't reverse on bad news. It reverses on good news. The Fed statement should have been good news. But the market got weak.
We will probably start to obsess over the "taper" again. "When will the Fed take away the easy narcotic?"