Tough week for Ben Bernanke gets worse as he throws ice cold water on the stock and bond markets, hinting that the $85B per month in money printing will begin to be reduced later this year and eventually ended in 2014 with rates rising in 2015. As much as I love Big Ben, I have less confidence in the Fed’s long-term forecast than my local weatherman’s five day forecast. Bernanke can jawbone all he wants, but I for one will be SHOCKED if the Fed comes even remotely close to being accurate even into 2014.

Stocks and bonds were taken to the woodshed on Wednesday and I do not believe the selling is over…

It’s All About Big Ben

The stock market rally that began last Thursday continued into the “all important” Fed meeting on Wednesday. It seems like every Fed announcement is now hailed as the most important one ever and this one is certainly no exception. To keep everyone on their toes, Bernanke & Company changed the announcement time to 2:00pm with the press conference beginning at 2:30pm.

There has been a strong tendency for the market to close higher almost 70% of the time on announcement day since the bull market began. With so much focus on this meeting, I fully expect some wide swings post 2:00pm with the possibility for several direction changes leading up to the “real” move into the close.

It’s going to get really interesting with all time highs in striking distance but significant downside consequences if the rally fails first.

Stay tuned…

Squawk Box TOMORROW at 6:30am

I am going to be on CNBC’s Squawk Box tomorrow, June 18, at 6:30am discussing the upcoming Fed meeting and the market impact their announcement could have.

Fed Day is Here

Today is Fed day with split announcements.  At 12:30pm, the official announcment and statement come out and then Ben Bernanke will hold his press conference at 2:15pm.

The Fed is not going to move rates.  They will likely downgrade their view of the economy.

So far in 2012, every single Fed statement day has been a big day for the bulls. 

The market is anticipating some extension of stimulus or outright quantitative easing (creating money to buy securities, likely in the bond market).  If the Fed obliges, I look for stocks to extend the week’s gains.  If not, we should see a quick downdraft and then another rally attempt.