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The FOMC has echoed its stance on low rates for an "extended period," though added a great deal of bearish language to yesterday's rate statement -- still, markets were rising.

Perhaps I was reading the wrong rate statement, but the one that I focused on reflected an extremely bearish Federal Reserve. The committee noted that developments abroad are less supportive of growth while adding more broadly that growth has been less convincing since the last meeting.

The FOMC went on to note continued weakness in housing and commercial property markets without the qualification that normally accompanies this discussion. Employment and capital deployment were also noted as being weak.

Yesterday's FOMC statement was about as straightforward as one can expect from the Fed, where real concerns were actually acknowledged without all the fluff that we normally encounter. Perhaps the rally that followed the rate statement, which is almost certain to reverse in the days ahead, is a reflection of market participants applauding the honesty that the Fed has exhibited. Or perhaps investors are so desperate for a reason to buy in this market that even the worst of news will suffice.

Whatever the reason, bulls will have their work cut out for them going forward. In addition to the worst pace of new home sales on record, earnings guidance among big name companies continue to be big disappointments.

Equities markets, meanwhile, are poised to test key levels in the days ahead. The present tone of economic data, which has almost uniformly disappointed over the past couple weeks, is certain to weigh on markets, likely resulting in fresh lows for broader indexes in the very near-term.

Disclosure: Author is Short KBH, EEM

Source: Riskier Assets Rise Following Bearish FOMC Rate Statement