There is an old adage: "Don't fight the Fed." Over the past couple years, it didn't apply as the market kept dropping when the Fed cut rates. The Fed just couldn't gain the confidence of the market as it seemed to be behind the curve as the economy went into freefall.

Recently things have changed quite a bit. The market is not fighting the Fed and it is celebrating anything the Fed does, even though some question the long-term ramifications of printing trillions of dollars in new money.

We are now seeing the seventh straight time the market has made a big upside move on the day of a Fed interest rate announcement. In addition, we have had several other days where we rallied big on surprise Fed announcements. If you have been fighting the Fed lately, you have been run over by a steamroller.

What is interesting today is that the Fed really doesn't have any traditional ammunition left to throw at this market. There is no room to cut rates and it is unlikely to announce anything dramatically new today.

We have to wait and see if what has already been done is going to work. Most likely the announcement today will contain some comments about how we still have many challenges but the pace of decline is slowing and the Fed is hopeful there will be improvement soon.

Even if the Fed announcement is a non-event as far as new policy goes, market players have obviously relearned that you don't fight it even if isn't doing anything new. We'll see some profit-taking kick in once the Fed is out of the way and the bears come out of the woods again, but there are persistent bids under this market and continued potential for squeezes.

I wouldn't be too aggressive on the sell side, but I'm certainly inclined to be locking in some gains into the Fed announcement.
James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.

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