Why is the F_E_D Knee Jerk Reaction So Consistent and So Wrong?

I am only going to try to answer this in the broadest of terms because I don't believe anything in the market is so simple it can be put in to a 30-second sound-bite.

The F_E_D has immense power over the market, both US and global, it is the ultimate, "Waiting with baited breath" event for market participants.

I think if there's one thing we can agree on it would be the two fundamental drivers of the market historically as far back as trading goes (even Japanese Candlesticks which were used for rice trading hundreds of years ago depend and portray these two forces)...

If you come from economics you'll say "Supply and Demand" dictate the market's moves. What about the release of yesterday's F_O_M_C minutes changed supply and demand in any fashion? Nothing.

Instead, I'd say the two fundamental drivers that drive even supply and demand are FEAR and GREED, emotions. Why else would a market act so emotionally and so consistently (not just stocks, but bonds, precious metals, rates, and currency)?

Yesterday we saw an "Emotional Overreaction"  and perhaps that's the reason the knee-jerk effect faded and wrong so often that I have for years warned of it before any F_E_D event. Today I'd argue we saw an equal overreaction, but this is the nature of the markets, they are like a pendulum that swings far to the left and then far to the right and it's all driven by the only thing crazy enough to cause such crazy reactions, HUMAN EMOTION.

This was the Sentiment of the day among retail and this is why we don't chase, but we know retail does, that's what makes head fake moves so effective and so predictable.

Many are upset cause they didnt go long instead shorted the market on dip yesterday.. Totally understandable bad sit.