Yesterday was a great day for the market bulls, driving up the Dow by 115 points.  Quarterly corporate earnings reports continued to be strong.  In addition, the Consumer Confidence Index was unexpectedly strong.  The S&P is at a three-year high!

Today will be different.  While the continuing flow of quarterly corporate earnings is expected to remain strong, there is a huge “unknown” at 2:15 PM, when Fed head Ben Bernanke will hold the Fed’s first press conference following the all-important FOMC (Federal Open Market Committee) meeting.  Mr. Bernanke’s comments can easily move markets worldwide very quickly.  Today’s anxiety is that he is not a confident speaker and might stumble before a withering barrage from reporters.

That anxiety is unwarranted.  Don’t forget he is very experienced at dodging questions he should not answer, such as predicting dollar strength.  He always takes questions from the crowd, following his frequent speechs.  He handles inane questions from the elected children in both the House and the Senate and does so adroitly.  He even tolerates questioning from Congressman Ron Paul well.  The likelihood of him saying something stupid is remote.

But, there is little he can say at this point to make the market rally even more.  If he announced QE3, the stock market would rally slightly but not much.  However, long term interest rates would go up, as more inflation would then be expected. 

Today’s risk is all to the downside.  Therefore, don’t expect much movement until the risk of Bernanke speaking is behind us.  Just hold your breath . . .