FED Sparks Huge Market Rally
On Wednesday, the market drifted down for most of the day while traders waited for the Fed to report on its bond buying program and the Fed funds rate. The Fed reported that it will trim the bond buying program by 10 billion monthly (from $85 billion to 75 billion). The Fed also said that it would keep the Fed Funds Rate at its current levels until unemployment drops below 6.5%.
The market initially fell quickly on the news, but it reversed direction just as quickly, sending the market on a huge upside run. The Nasdaq rose over +50 points in 10 minutes! The move erased all of the losses from December, and the market is poised to breakout to new highs.
On the day, the Nasdaq gained +46 points (+1.15%), the S&P rose +29 points (+1.66%), and the Dow climbed +292 points (+1.84%). Volume was well above average. Up volume beat down volume by a 5 to 1 ratio, and advancers beat decliners by a 2.8 to 1.