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The Fed made a few minor changes to its policy statement today, and it was enough to spook the market a bit. Part of the problem is that Chairwoman Janet Yellen isn't as vague and uncertain as her predecessors, so it scares the market when she quantifies terms like a "considerable time" to mean six months. I doubt Ben Bernanke would have stated things so simply.
The dip-buyers did show up and took us well off the lows by the close, but it was a very messy day of action with significant pressure on select momentum names that have been doing well lately. Overall, the move in the indices was quite mild but breadth was 2-to-1 negative, and there were plenty of moans and groans from traders who were caught by surprise in various names.
The big question now is whether we see downside follow-through tomorrow and actually have a failed bounce. As long as the indices hold above last week's lows, we will look OK technically, but my main worry about the lack of good leadership is still an issue.
The bears have been waiting for the Fed to produce a negative catalyst, but it is too early to draw any conclusions from the news today. It is obvious that the Fed is on the path toward further tapering, and that hasn't been an issue so far. What we have to look for are further indications that the Fed is no longer a fountain of endless support.