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Market Preview: The Silence of the Bears

NEW YORK ( TheStreet) -- Monday was a quiet session, and Tuesday looks set up for more of the same. But after that, investors should be ready to buckle up.

Apple (AAPL - Get Report) has its big product announcement on Wednesday with the iPhone 5 expected to finally see the light of the day. Germany's constitutional court could steal some of Tim Cook's thunder though with its ruling on the European Central Bank's big bond-buying plans.

Thursday brings the resolution of the Federal Reserve's latest policy meeting with Ben Bernanke & Co. anticipated to deliver not only another round of quantitative easing but possibly an extension of the central bank's promise to keep interest rates at the current historic lows beyond late 2014. Since the decision won't come until mid-afternoon, Friday's trading will carry a heavy Fed influence as well.

Thus far, the calls for a pullback in U.S. stocks have been few and far between in the wake of this latest spike higher. Instead, the quick 2%-plus burst to multi-year highs late last week seems to have emboldened the bulls and silenced the bears.

For instance, Tony Dwyer, an analyst with Canaccord Genuity, was moved to reiterate his 2013 target of 1650 for the S&P 500 on Monday, a call for roughly 15%-plus appreciation from current levels.

"Until this past year, periods of sub-3% core inflation suggested the equity market should trade at a minimum 15 multiple," he wrote. "The European Debt Crisis and recession, slowing growth in emerging economies, and fears of 'fiscal cliff' have priced in a possible recession that we continue to believe remains highly unlikely.

Based on Friday's close at 1438, the S&P 500's forward price-to-earnings multiple stood at 13.9X. The main risk being flagged by Dwyer is a jump in interest rates, so the Fed's promise is providing considerable underpinning for his confidence.

"In our view, outside of a geopolitical shock, the risk in such a bullish fundamental outlook is a rapid and sustainable rise in interest rates," he said. "At this juncture, there appears to be very little evidence of that happening, especially with long-term interest rates hovering near historically low territory."
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