The market has been so volatile lately we probably shouldn't be surprised that the Fed announcement resulted in a vicious whipsaw. Initially, the bears took control when the Fed didn't offer anything concrete in their policy statement other than nailing down how long they anticipate rates to stay low.
The market was sailing along in very positive territory before the Fed statement. After we sold off and went negative on that news, the mood began to change and suddenly there was a surge in optimism. The disappointment about a lack of aggressive action turned into anticipation that something was cooking and would be forthcoming soon. GS helped to fan the flames of excitement with some speculation that QE3 was on the horizon. Bonds exploded, the dollar collapsed, precious metals sunk and equities bounced big.
After the selling of the last few weeks, a big oversold bounce shouldn't come as too big of a surprise. A combination of computerized trading, underinvested bulls and short covering blasted us higher into the close without a pause.
The bulls are feeling a little better now that we finally managed a good bounce and a strong finish, but if you step back and look at the big picture, it still isn't pretty. Although the moves lately have been outsized, today's bounce was a routine oversold bounce in the bigger scheme of things.