• Thanks for reading today.

Thanks for reading my Diary today. I hope my writings had value to you.

Enjoy the evening.

And God bless Uncle Vinnie.

• Here is his response to 'Sock It to Me.'

Below is Omega Advisors' Lee Cooperman's response to my "Sock It to Me" post:

What isn't confusing is short rates don't belong at zero and anyone who doesn't expect them to rise over the next couple of years is an idiot or devoid of historical knowledge or common sense! Further, if economic conditions merited 0 rates the stock market returns are going to be a hell of a lot less than expected by most. You can quote me!

-- Lee Cooperman, Chairman of Omega Advisors

• How much to buy?

There is about $550 million to buy market on close.

• Here is the firm's take.

Goldman Sachs on the FOMC actions:

BOTTOM LINE: The March Summary of Economic Projections (SEP) indicated a more hawkish path of the policy rate than that seen in the December SEP. The statement included a move toward qualitative guidance, but was roughly neutral on net in our view.

MAIN POINTS:

1. The median participant's forecast for the funds rate (the "dots") remained at 0.13% at end-2014, but rose 25bp to 1.0% at end-2015 and rose 50bp to 2.25% at end-2016. The median projection for the longer-run rate remained 4.0%. Only two participants expected that the first hike would come in 2016, down from three in December.

2. The Committee adopted qualitative forward guidance by stating that it currently anticipates the fed funds rate to remain in the current 0 to 25 basis point range "for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored." Looking further ahead, the statement indicated that "even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run." In addition, the statement said that "the change in guidance does not indicate any change in the Committee's policy intentions as set forth in recent statements." We see this set of outcomes on the forward guidance as relatively neutral.

3. The assessment of economic conditions noted slower activity in recent months, but partly blamed the weakness on "adverse weather conditions." The assessment of household spending and business fixed investment was changed from "has advanced more quickly" to "continued to advance." The description of inflation and inflation expectations was unchanged.

4. As overwhelmingly expected, the Committee continued to taper the pace of its asset purchases by $10bn to $55bn/month, beginning in April. An accompanying statement on the New York Fed website indicated no other changes to operating parameters.

5. Minneapolis Fed President Kocherlakota lodged a dovish dissent, noting that the Committee did not express its commitment to return inflation to the 2 percent target strongly enough.

6. With regard to participants' economic projections, the mid-point of the central tendency of the unemployment rate was lowered by 0.25pp to 6.2% in 2014Q4, by 0.2pp to 5.75% in 2015Q4, and by 0.15pp to 5.4% in 2016Q4. In addition, the longer-run or "structural" unemployment rate was lowered 0.1pp to 5.4%. Real GDP growth was lowered to 2.9% in 2014, 3.1% in 2015, 2.75% in 2016, and 2.25% in the longer run. Changes to core and headline PCE inflation projections were minor. The core PCE inflation projection remained at 1.5% at end-2014, rose a touch to 1.85% at end-2015, and remained at 1.9% at end-2016.

• The Fed is completely winging it.

Bottom line: Whirlybird Janet Yellen has just damaged her windshield wipers.

FOMC guidance is now so confusing and just reinforces what we have all known for a while, the Fed is completely winging it.

• Half, to be specific.

I am covering half of my shorts into this whoosh lower.

I am back to less than 10% net short now.

Staying in motion -- locomotion.

• I am a bit more than 20% net short now.

•  I'm the polar opposite.

Repeating for emphasis, on stocks and bonds I am at the polar opposite of Mae West who said "I only like two types of men -- foreign and domestic."

See my opener this morning for the reasons and today's New Era Thinking.

•  And now, Whirlybird Janet takes the stage.

My view is that the markets are taking the FOMC comments as more hawkish than expected, as bonds have sold off and the U.S. dollar has rallied strongly. (Note: The drop in fixed income prices and rise in yields helps explain the strength in money center banks).

The qualitative guidance seems a bit vague.

One important difference in the FOMC statement is that policy remains appropriate at the current time, compared with the prior statement that policy will remain appropriate for a considerable period of time.

Bottom line, the Fed remains policy dependent and committed to maintaining an easy monetary policy for some time to come. The move from quantitative interest-rate guidance to a more vague, qualitative policy could bring some uncertainty and volatility to the stock market.

Peter Boockvar comments on my point regarding the vagueness of policy and the possible impact on bond yields:

The sharp selloff in Treasuries in response to the forecast that 'many' Fed members believe the fed funds rate will be 1% by the end of 2015 is also being reflected in the fed funds futures contract where they've now priced in a 100% chance of a 75 bps rate by December 2015 vs an 82% chance yesterday. The odds of a 1% fed funds rate by January 2016 is now 28% vs zero yesterday. The first possibility (24% chance) of a rate hike is in May 2015 with August/September now at 100% of the first hike. This all said, these bets are all based on FORECASTS, particularly the Fed's, so in all honesty, we really don't know when for sure short rates will go higher as the economic data will be the true driving force. But, now we're even more confused on what quantitative benchmarks the Fed is using to lead their way. If there is one thing for sure though, the Fed will go very slow in reversing their fed funds policy (let alone get out of QE) therefore running the major risk of being behind the curve. The bond market however has and will continue to adjust policy for them.

Now Whirlybird Janet conducts her first press conference. Or is it Ruth Buzzi?

• The slope of the yield curve is flattening

That's not typically good for equities (especially of a bond-equivalent kind).

• A quick analysis of the Fed's actions by Peter Boockvar (faster and more value added than what I could conjure up!).

As the Fed tapered as fully expected, the only mystery was what forward guidance in raising the fed funds rate would look like but putting aside for a second the details of it, "the change in the Committee's guidance does not indicate any change in the Committee's policy intentions as set forth in its recent statements." Therefore the changes are more logistics than anything. In the analysis of when to act the Fed said they "will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. This is what is now called 'qualitative guidance' and I now refer to it as 'vague guidance' and much less valuable than something more 'quantitative' that we can at least gauge. Policy is now even more subjective. Winging it is also another way of stating the direction of policy. Not helpful.

Bottom line, the asset purchase reduction continues at the measured pace most wanted by the doves on the committee and we are about one month away from a 50% drop in the pace of QE. Forward guidance doesn't tell us when the Fed may raise short term interest rates, it just tells us what benchmarks must be met (however now vague) in order for them to happen. We have to take Fed forecasts of when these thresholds may be hit with a grain of salt based on their littered history of poor forecasting. Case in point, the original quantitative guidance of a 6.5% unemployment rate in 2015 and previous to that, Bernanke's estimate that QE would be completely done when the unemployment rate gets to 7%. The February unemployment rate was 6.7%.

Lastly, the Fed tightened its 2014 GDP growth forecast to a range of 2.8-3% from 2.8-3.2% and altered its PCE forecast to 1.5-1.6% from 1.4-1.6%. Growth in 2015 is 3-3.2% from 3-3.4% and the PCE remains 1.5-2%. Based on this, "more Fed officials see at least a 1% fed funds rate at the end of 2015. The fed funds futures contract says the first possibility of the first rate hike comes in May 2015.

• No real surprise in Fed comments and actions.

I have added to shorts.

Stay tuned.

• And rising yields will start it all.

Rising yields will sow the seeds of slowing global economic growth, an important factor in my cautious market view -- see "New-Era Thinking."

• Seeing some upside. 

Don't look now, but ProShares UltraShort 20+ Year Treasury (TBT) might be breaking out to the upside.

• Run, don't walk, to read "Renminbi Rate Hits 'Red Line' Level for Losses" on FT.

Financial Times Hong Kong reporters Josh Noble and Patrick McGee discuss the Chinese currency's collateral damage.

The renminbi on Wednesday breached a closely watched level considered a "red line" that could cause losses on billions of dollars worth of derivative products.

The onshore renminbi depreciated 0.1 per cent against the dollar to Rmb6.20 ¿ its weakest since April 9 2013, as the Chinese currency extended its month-long slide.

Analysts have warned that a move past Rmb6.20 would cause heavy losses on billions of dollars of complex hedging products taken out by Chinese companies ¿ often exporters ¿ that wanted to bet on renminbi appreciation.

• I'll be back in a while.

I will be at a funeral until about 1:00 p.m. EDT.

See you all back here then.

• Shares are moving higher.

ProShares UltraShort 20+ Year Treasury (TBT) is moving higher.

I added yesterday under $69.

• The index is leading to the downside.

The Russell 2000, for a change, is leading to the downside today.

• That is, $535.94.

Apple's (AAPL) shares are approaching $535.94 (100-day moving average) now.

• At $187.84.

I added to my SPDR S&P 500 ETF (SPY) short at $187.84 just now.

• I further pressed my Microsoft short today.

• Here are some examples.

Below are some examples of today's new-era thinking:

• Biotech and the cloud form the basis of our investment and business futures.
• Profit margins and valuations will remain elevated.
• It's the weather, stupid.
• Cash is trash.
• High-frequency trading buoys market liquidity.
• We are in a period of extended prosperity and self-sustaining growth.
• The global capital markets and economic growth trajectory will be immune to rising interest rates.
• China will continue to be the world's economic growth driver.
• China's leveraged banking and shadow banking system pose limited risks to the capital markets.
• Geopolitical risks are irrelevant to the global stock markets.
• Housing has entered a multiyear period of growth in activity and prices.
• Elon Musk is the new Steve Jobs.
• Tesla (TSLA) is the company of the future -- on so many levels.
• Starbucks (SBUX) is a technology company.
• The Fed's obscuring of natural price discovery will be maintained ad infinitum.
• There will never again be a 10% market correction.

Be forewarned.

• Mortgage application data suggest as much. 

Mortgage applications fell -1.2% last week, marking the fifth drop in the last six weeks.

Purchase applications fell slightly (-0.9%) for the second week in a row, following a temporary bounce back three weeks ago, and is currently just above its lowest level since 1997 set in mid-February.

Refi applications also continue to stall out at very low levels and remains near the post-2008 lows. The average 30-year rate was little changed at 4.5%

• At $14.52.

I am adding to Direxion Daily Small Cap Bear 3X Shares (TZA) at $14.52 in premarket trading.

• From the St. Louis Fed.

If you don't believe that corporate profit margins will begin to mean regress, check out this chart from the St. Louis Fed.

• Here are his ursine musings.

Mark J. Grant addresses "More New Money (From the Fed)" in his commentary today. Those who dont enjoy Mark's ursine musings might pass on reading this. But as I have mentioned, I have found it profitable to read as much as possible:

People are often deceived in life as well as in viewing the markets because their perception is wrong. A hexagon can look like a square from a particular angle but closer examination will reveal that it is not. I am afraid that lately the focus of many people and institutions when viewing the markets has been incorrect. The focus has been centered on the Fed's so called "Taper" which leads one to believe that there is less money sloshing about in the system. This notion of "less" is causing the problem and is leading some very smart people to some very wrong conclusions.

In the first place no money has been taken out of the financial system by the Fed. It is all still there. Several trillion dollars of it keeps whooshing around and finding its way into equities and then bonds and then Real Estate and then back to equities as it sloshes this way and that way like the ocean on a windy day. No money, not one cent, has been reabsorbed by the Fed or the Treasury.

This month the Fed will open the vault once again and pour out more money. It is likely to be a little less than last month but you can be assured that more money is coming. Since money doesn't live in drawers or hide under the bed in any meaningful amounts you then know that it is going to get put into the markets.

Fed = Find Enough Dollars

Those that keep calling for much higher interest rates have been proven wrong and will continue to be proven wrong. The Fed has enough resources currently and is still making more of them to control, to a great degree, the bond markets. The Treasury Department of the United States does not want to pay higher interest rates as it burdens the country and the Fed is making sure that they do not have to pay higher rates. Since the Fed is still in the mode of creation and since they can buy bonds all along the curve to suit their purposes interest rates are not going to go significantly higher and, in fact, because of the magnitude of the Fed's creation last month, this month and next month they may go significantly lower.

You might say this is all a giant Ponzi scheme but I have a different viewpoint. I think the Fed carefully studied the Social Security System and then just reapplied those principles.

In any event, Ponzi scheme, not Ponzi scheme, every month, like Ed McMahon's famous line, "Here'ssssssssssssssssssssss Money."

So unless we have a war or some giant earthquake or little green aliens arrive from Alpha Centauri the markets will vacillate but carry on to higher ground. You may recall the Bible and something about in the beginning God created man. The financial debacle of 2008/2009 was something like that. In the beginning the Fed created money to save the financial system. That was in the beginning. Now they create the stuff just because they can. In the old days it was good to be King. Forget King; replace it with Fed.

• At $39.69.

I added to my Microsoft (MSFT) short at $39.69 in premarket trading today.

• The company whiffs on earnings.

Break in: FedEx (FDX) misses.

• Here is his morning commentary.

The gospel according to Peter Boockvar:

Somewhat lost in the macro sauce over the past month, hidden mostly by news in China and Russia/Ukraine, is back in focus today with the FOMC meeting. This brings us back to the whole debate of whether tapering is tightening and what will be defined as 'qualitative guidance' in trying to guide the market to when they may raise rates. With respect to the tapering debate, I'm in the camp that it is a form of tightening. As an example, someone who earned $85k in 2013, is getting their earnings cut by $10k per month. After today, this imaginary person will only be making $55k. It's still income but there is a tightening in his/her budget. On guidance, no matter how the Fed wants to create a new blueprint, the outcome is still dependent on how the economy unfolds, not what their forecasts say. Faster growth and/or inflation will determine the timing and pace of policy as the bond market will adjust quicker than the Fed and the Fed will be forced to follow.

Mortgage applications continue to languish near the lowest level since 2000 as the MBA said purchases fell .9% w/o/w and 14.8% y/o/y while refi's were down by 1.3% w/o/w and 63% y/o/y. Refi's won't improve unless we get a leg lower in rates which is unlikely and purchase applications need the first time home buyer back in a broader way.

Not fully capturing the bounce in markets the last few days and more focused on the pre weekend Russian concerns, II said Bulls fell to 52 from 55.1 but all of the 3.1 pt drop went into the Correction camp as Bears remained unchanged at a barely visible 17.4.

Kuroda of the BoJ spoke overnight and said his extraordinary policy of massive yen printing is working and that Japanese inflation is "moving smoothly toward its 2% target." He also said the sales tax hike "won't interrupt virtuous economic cycle." On the possibility though of even more QE in the face of the economic risks from the upcoming tax hike, another BoJ member actually said the "hurdle for any additional easing by the BoJ is high" and he warned of some risks of doing more. The yen is flat in response to both. The weaker yen over the past year was still not enough to lift exports above expectations as they rose 9.8% y/o/y in February, below the estimate of up 12.5%. The value of imports, driven by the weak and higher cost of energy, rose 9%, above the forecast of 7.2%.

In the UK, another place of experimental monetary policy, jobless claims in February fell by 34.6k, more than the estimate of down 25k. For the 3 months ended January, their unemployment rate held steady at 7.2% and wage growth ex bonus's quickened to 1.3% y/o/y from 1% and getting closer to the 1.9% rate of CPI. With quantitative guidance also junked in the UK, the data points don't move the needle on when rates will eventually rise but the pound is trading higher with gilts lower on the better job figures.

• The risks to the markets that have accumulated recently remain in place.

"You know what the Ukraine is? It's a sitting duck. A road apple, Newman. The Ukraine is weak. It's feeble. I think it's time to put the hurt on the Ukraine."

-- Kramer (Michael Richards), close to victory in Risk, in "The Label Maker" episode of "Seinfeld"

Late last week I wrote that the Crimea crisis would pass and would be nonthreatening to the markets.

Now with stocks rallying back to week-ago levels, however, the previous and emerging risks to the markets that have accumulated recently remain very much in place:

• elevated valuations after an unexpected 25% rise in price earnings ratios in 2013.
• speculative excesses (IPO market, biotech, etc.) have appeared and are being ignored;
• rising inflationary pressures (food, energy prices, etc.);
• disappointing global economic and corporate profit growth; and
• the fixed-income market continues to support the notion of subpar domestic economic growth and has failed to match the risk on the move in stocks. Mind the gap of rising valuations and subdued to lower bond yields.

This week's expected rally has been unimpressive. (I started the week slightly net long.)

As I mentioned yesterday, Monday was the second slowest volume day on the NYSE this year while yesterday's volume was the third lowest in 2014.

I am back 15% net short.