Since the bottom in March about the only thing you needed to know to navigate this market was the old adage, "Don't fight the Fed."
The trillions of dollars in stimulus may not have "fixed" the economy but it sure has boosted the stock market. That wasn't the primary objective but when you throw cash at an economic problem much of it ends up in the stock market.
At 2 p.m. ET, the Fed will provide its latest forecast and updated policy. That is followed by a press conference with Fed Chair, Jerome Powell, at 2.30 p.m. ET.
Once again the bears will be wishing and hoping and praying for a "sell the news" reaction. The thinking is that the Fed can't be any more dovish than it already is and that it must be fully discounted by the market after such a huge move.
Both points are questionable. The Fed is already signaling that it is ready to do more stimulus. Powell really isn't concerned about the bubbly action in the stock market. That is just a side effect of propping up the economy and isn't viewed as a major problem.
But isn't the impact of Fed stimulus already discounted to a great degree? If you look at valuations that might be a good argument, however, this is liquidity-driven action and there is still plenty of cash sloshing around out there, looking for a home.
Valuations are mostly irrelevant and that is part of the reason we have had so much crazy trading.
We'll see if the bears can put a negative spin on Powell. However, they are likely to be quickly unnumbered and outgunned by dip buyers who would love to put money to work on a pullback. The trend is still solidly positive and that means that traders are buying the dips and chasing the rips.