This fundamentally has been the bet of traders of all kinds for the past 3 1/2 years or so. If things get too bad in the markets the Federal Reserve will come to the rescue. The belief is that the Fed is bigger than the market. That come what may the shamans can offer a “wink and a nod” and all will be well. That is what these guys think they saw today.
The question is whether the market overwhelms the Fed. If it does, and it seems possible given developments, a whole new way of looking at the world could emerge. And these things do happen. So be warned. But both ways.
After a swift and serious selloff, stocks have managed to rise on Thursday’s session with help from the soothing words of St. Louis Federal Reserve President James Bullard. And after dropping just shy of 10 percent from high to low, the S&P 500 looks to have finally bottomed out, some traders say.
“Whether the complete correction is over I’m not positive yet, but there looks to be some relative calm,” said Jim Iuorio of TJM Institutional Services. “I think the next leg is going to be higher.”