Pretty simple if you are a bull: You want the market down big today. Not only that, but you want the futures to be off badly tomorrow and the stock market to get hammered at the opening and then stay down, perhaps dipping at 1:30 right into the Fed statement.
But have you ever noticed it is never like that? That it always seems to do this kind of thing where it doesn't stay down but perks up and that it actually comes into the meeting with a head of bullish steam or is at least rallying into the release? Remember, the market was up big yesterday, so it would have made a ton of sense to sell off today as those in fear of the Fed bolt the market. That's the jockeying for position that should be happening.
As much as we like, we can't figure out who is making these bets. Shorts? Longs? Who is pushing the market up ahead of what could be a statement that might drive us lower?
Of course, the bulls want the decline ahead of the meeting so badly, because then it is obvious what to do. We would know if we get "no taper" that we could buy with impunity and watch it go higher if we were down going into it. The market just confounds the most people possible. And if we had sold off hard enough today, then you could buy the market after the statement, because the big, bad event would be behind us.
Now, let's layer in another element of lunacy: the banks. The banks need the bond-buying to end. They need the yield curve to have some inflection. But they are acting exactly the opposite of how they should be if the comments I wrote earlier about the Clorox (CLX)-Colgate (CL) contingent are right. Bank of America (BAC) should be screaming if the Clorox/Colgate mob is going down, because that means the economy is accelerating, which means the Fed will stop buying bonds and let interest rates go higher, which is how the banks make more money.
But just as the market refuses to stay down to make things easier for the bulls after the statement, the banks refuse to rally, even as they should.
Just another sign that the stock market is not nearly as rational and is far more emotional and anti-empirical than so many think it to be.