Wow! That was a market surprise. The Fed did not start tapering!
The main issue has been the spikes in yields and consequences on the mortgage. Already there were some signs of decrease mortgages sign up and so the fed evidently got worried of stalling the feeble recovery.
So this data – point signals that, in reality, the US recovery is much more feeble than before.
This fact anyway clear another obstacle to the massive rally. The SP500 is by any mean overstretched and should pull back a little (3-5%), but this market is more an emotional black/red gamble than a technical market.
The Red/Black Casino style events still on the path are
US Debt Ceiling – unless they decide again to postpone/stopgap the issue
German election – it should be uneventful as PM Merkel is solidly ahead in the polls
Berlusconi – even if thrown out he should not make the Government fail otherwise he will have a polls backlash
Syria – 21 September first deadline of the Russian/US bluff/deal
Update:
Institutional Investors are in neutral
Last days rally had been driven mainly by short covering position (shares. AUD, Oil, Gold)
The Mutual Fund Survey (US) is showing retail investor clearly going bullish.
Markets is priced to perfection. Any tail risk will have great consequences
investorpolitico 