The market’s comeback gained momentum Wednesday, the Dow erasing all of Monday’s losses and the S&P climbing back above its 8- and 21-day moving averages. The sell-off that greeted investors to start the week appeared to be at least a short-term complexion change, but this market continues to prove its steadfast resilience. The S&P and Dow both finished up around 1.3%, while the Nasdaq gained 1.0%.
The price action in stocks over the last two weeks could be proof that the Fed still largely controls this market. FOMC minutes last week hinted that some hawkish Fed governors want to take away the punch bowl in 2013, which weighed on the market. But all it took to reassure jittery investors this week was Chairman Ben Bernanke’s congressional testimony. The Chairman reiterated his stance on QE that its risks are manageable and benefits significant.
Disclosure: Scott Redler is long GOOG, BAC, NFLX, BBRY. Short SPY