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“I think the rally is sustainable,” says trader Brian Kelly, founder of Shelter Harbor Capital. He and many of the other Fast Money traders expect current levels to hold.“Technicals suggest 1409 is the next key level on the S&P,” says trader Tim Seymour, founder of EmergingMoney.com.Of course Kelly, Seymour and all the traders are keenly aware that the statement coming at the end of the FOMC meeting on Wednesday is bound to have the market on edge.
“Even if Bernanke doesn’t say anything outright, I think he hints that we get some kind of QE and the process starts all over again,” Kelly adds in defense of his bullish outlook.If the rally does endure, it will be some rally. The S&P 500 has gained 7.2 percent from a five-month intraday low reached on June 4. And on Tuesday, the technical took a very bullish turn – the benchmark index closed above its 50-day moving average of 1,346.90 for the first time in seven weeks. But the sharp gains leave the market vulnerable if the outcome of Wednesday's Fed meeting doesn't meet market expectations.
"People are anticipating some type of response from the Fed, and are buying or covering shorts in anticipation of that," explains Paul Zemsky, head of asset allocation at ING Investment Management in a Reuters interview. "There's a risk the market gets disappointed."
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