While the Fed left current interest unchanged at record low levels, it will also continue with operation “Twist” by buying longer term treasuries and selling the short end of the yield curve.

The Fed’s view of the economy was considered “frustratingly slow” but appeared to be somewhat stronger than in October. After the announcement, the markets briefly sold off as traders had hoped for another round of Quantitative Easing. However, the Fed’s affirmation that they would in fact act, should the economy fall apart, was interpreted as a positive for equities supporting the rebound into the close.

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As the situation in Europe unfolds, equity ETFs tumbled once again as the S&P fell 2.79%. And after a period where it looked like volatility was falling, the risk switch has turned back on again, with the VIX rising 16.05% to 34.77.

Also, the dollar improved against the Euro to end the day at $1.37/Euro. We might’ve been approaching bull range, but uninspiring economic indicators and political frictions in Europe suggest we won’t be making much headway any time soon.

Just when the European crisis appeared to be improving, the emergence of the Greek referendum has put a nail in the coffin. Letting the public decide whether or not to accept the bailout can have a destabilizing impact, if it’s rejected. The bottom line is that Greece completely lacks credibility and is becoming the laughing stock of the EU. But the joke isn’t funny anymore.

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After a stellar performance for equities last week, Halloween scared off investors to make markets end the month on a low note. Major indexes took a sizeable dip, with the S&P 500 falling 2.47%. Also, after recent dollar weakening, the dollar came back up to $1.38/Euro. Most startlingly, the VIX jumped a staggering 22.14%, nearly hitting the 30 mark.

It was about time that markets seriously considered Europe’s bailout funding uncertainty after last week’s seemingly irrational exuberance. Sure, Europe finally made some progress last week, but a concrete EFSF funding plan still doesn’t exist. That’s enough reason to continue exercising major caution.

Greece still isn’t completely resolved as it enters a contentious political debate surrounding whether or not it will accept its bailout package as PM Papandreou called a referendum.

Essentially, the perception that Greece may have been saved is seriously up in air. Even more surprising, most Greeks are against the bailout package. Last week’s equity ETF jubilation just might be undone soon if we the reach the final act of this Greek tragedy sooner than expected.

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In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 10/30/2011.

The markets continued to feed on Europe’s mother of all debt deals designed to solve broad issues after a 50% haircut agreement was reached. However, worries persist, and rightfully so, that the execution of the new master plan may be questionable as more details become available.

Nevertheless, upward momentum has improved and put our Domestic TTI back into ‘Buy’ mode as posted last Monday.

I have begun to ease into some equity ETF positions subject to my trailing sell stop discipline with full awareness that all is not well in the Eurozone. To my way of thinking, only more time has been bought without real changes to structural issues.

Still, the trend is up, and we’ll carefully follow its direction.

This week, we covered the following:

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