The Bernanke "V": stocks up, stocks down, stocks back up. (Read more: Stocks Pare Gains but Still Higher; FB Falls 4%)
Huh? Dow up 100 before Bernanke, down 100 within a couple minutes of the speech coming out, then bottoming about 10:15am ET and rallying back to up 100?
This happens for a simple reason: no one reads the speech in the first seconds after it comes out. Traders simply scan for keywords manually — or worse, have computers scan for keywords — and when they didn’t see the kind of words they want, they sell. (Read more: Bernanke Is Signaling 'More Activism': Pimco's CEO)
Bernanke made very little mention of QE-type phrases. Very little on expanding the balance sheet, on cutting interest on excess reserves, for example, all words that would have been searched for by people looking for QE3 hints. (Read more: Fed Chief Paves the Way for More Easing—Just in Case)
But a few minutes later, there was time to look at the speech a little more carefully. It wasn't a short one. It took me to almost 10:20am ET to finish it. Apparently that was true for a lot of other people.
Most of the speech was a spirited defense of nontraditional policies. Mr. Bernanke said that nontraditional policies "can be effective, and that, in their absence, the 2007-09 recession would have been deeper and the current recovery would have been slower than has actually occurred."
There was several comments on the economy: it was "important to achieve further progress" on unemployment, and the overall economic situation was "far from satisfactory."
And he said that inflation was under control.
After defending his policies, Mr. Bernanke offered this conclusion: "The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out further use of such policies if economic conditions warrant."
There is the Bernanke put.
—By CNBC’s Bob Pisani
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