Investors' emotions weren't the only things to go on a rollercoaster ride after the Federal Reserve's decision not to taper, MoneyShow’s Tom Aspray explains what else happened, and what to expect before the ride's over.

The majority of analysts and economists were quite shocked by the FOMC announcement last Wednesday to leave their bond buying program intact.. There were a few unusually angry comments from investment pros as they apparently tried to save face for telling their client that the taper was a sure thing.

There was also a consensus amongst investors that the FOMC announcement would have little impact on the markets and that was also wrong, but hopefully, they did not sell ahead of the announcement.

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It was definitely a wild ride for the markets after the FOMC announcement, as the extent of the swings in many of the key markets surprised even the most seasoned pros. The one minute charts of the S&P 500, gold, the US dollar and the DJ US Home Construction Index from the WSJ illustrates this point.

The S&P 500 was trading just below 1703, and then proceeded to move above 1729 in the next sixty minutes. This was a change of over 1.5%. Gold was trading around $1317 per ounce just before 2:00 PM Eastern and then shot up to $1358 before the day was over. 

The dollar index plunged on the news, while the DJ US Home Construction Index was up about 6.5%, as traders jumped in, to buy the homebuilding stocks or cover their short positions. Interest rates dropped sharply and, as I noted on Thursday, it is my view that there were “Pivotal Turning Points in 4 Key Markets”.

Some seasoned investors, like Jim McDonald, the chief investment strategist for Northern Trust, thinks stocks are the best place to be. They have $803 billion under management and he commented that "The relative return prospects for stocks look measurably better than bonds."

Of course, the stock market still has plenty of challenges to overcome, as the casting for Dumb and Dumber continues, with the budget and debt ceiling battle in Washington DC. Investors are already nervous about the upcoming earnings season, which starts on October 8 with Alcoa Inc. (AA).

It is likely that the stock market will take some time to digest the recent gains, as choppy trading is common in both September and October. Since the outlook for the earnings seasons is quite negative, they may be better than expected. From a technical standpoint (see below), there are still some hurdles for the market to overcome, but I expect even higher prices by year-end.

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There are also plenty of global challenges for investors, as, by Monday’s opening, we may know the winner of the September 22 German elections. While Angela Merkel may win, she may have a tough time putting together a winning coalition.

This uncertainty has not held back the German stock market as the Dax Index continues to lead the S&P 500. Since the June 2012 lows, it is up well over 45%, which is considerably better than the 34% rise in the S&P 500.

The economic data in Europe continues to improve, as there are more clear signs that the recession is over. However, like in the US, the recovery is likely to be feeble initially. Things are also looking up in the United Kingdom, as their Purchasing Managers Index (PMI) surged in the latest reporting period, breaking through the resistance, line a, that goes back to 2006. This has helped to strengthen the pound, and a move above 1.6800 would be an upside breakout.

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The lack of fed action clearly illustrates the sluggish nature of the US economy, but one needs to separate the short- and long-term economic outlook. In both 2010 and 2011, the economy hit some soft patches that lasted long enough for some to conclude we were in another recession. The latest fed projection is for GDP growth to be 3% in 2014.

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Tickers Mentioned: Tickers: SPY, DIA, QQQ, IWM, IYT