Is it just me or was the world ending like a day or two ago. Spectre once again I think you have it right, pre fomc run up, good trading. Kudos to everyone who caught the gap up.
For those who may have missed the reason for the drop, at 12:56 eastern: "In prior research, Moody's identified five monoline financial guarantor groups as being most exposed to deteriorating performance of residential mortgage-backed securities: CIFG, FGIC, SCA (SCA), AMBAC (ABK) and MBIA (MBI). Based on further analysis conducted since early November, they continue to believe CIFG is most likely to fall below Aaa capital benchmarks, though they have announced a capital enhancement plan which would significantly reduce that risk. Moody's also continues to see FGIC, SCA and AMBAC as somewhat likely to exhibit a capital shortfall under one of the stress models previously described. And with regard to MBIA, additional analysis of its direct RMBS portfolio leads Moody's to believe the guarantor is at greater risk of exhibiting a capital shortfall than previously communicated; they now consider this somewhat likely."
Not this? "Several Wall Street firms have been subpoenaed by New York state prosecutors seeking information related to the packaging and selling of debt linked to risky mortgages, according to a published report Wednesday."
How about the fact that the market was extremely overbought and approaching overhead resistance? Does news move the market, or does the market move the news? Matters not to those who trade what they see.