NEW YORK ( TheStreet) -- The stock market acted bullish on Tuesday, and the supposed reason was the hope that Ben Bernanke and the Federal Open Market Committee are going to make a big announcement.After the FOMC concludes its meeting on Wednesday Bernanke is supposed to have a press conference, and maybe he might pop the cork on a surprise bottle of stimulus champagne. Is that possible? Yes, especially in the light of the uncertainty and banking instability in Europe and in this country. Is it likely to happen Wednesday? My guess is no, not yet. Why am I feeling like the saying of the day should be "ready, get set, not yet"? Blame my cynicism on the price of gold, which didn't participate in Tuesday's rally, and actually went down. If the FOMC and Bernanke were all set to use their biggest options to stabilize the U.S. and European economic woes, I would think we'd see this reflected in the price of gold moving decisively higher. Take a look at this 12-month chart of the SPDR Gold Shares ( GLD), an ETF that's geared to closely replicate the price of 1/10th of an ounce of gold per share. Gold closed Tuesday at approximately $1,619, down almost $8 an ounce from Friday's price. GLD closed at $157.16, down about a half of 1%.
The theory suggests to its adherents to look for a 5 wave that the majority of time brings a climactic ascent to new highs. If that happens for gold it could come before 2012 closes. The gold-mining stocks as represented by the Market Vectors Gold Miners ETF ( GDX) are still well below both their 100-day and 200-day moving averages, as seen in this chart.
Another reason I believe the Federal Reserve will postpone the eventual next round of quantitative easing is this is a presidential election year, and the Fed doesn't want to be accused of doing anything that favors either candidate. My third reason for my sense that the Fed isn't going to generate some big, powerful and exuberant surprise on Wednesday is the problems in Europe are still hanging over the world's economy. The trauma-drama could play out more and emotionally lubricate the ultimate solutions. The so-called "Operation Twist" ends this month, so I'll leave the door open for the Fed chairman to announce an extension of this program as well as reiterating the FOMC's readiness to drop billions of dollars from helicopters at a moment's notice if the economic news gets much scarier. Carol Pepper, CEO of Pepper International, told Jeff Macke on Tuesday's Yahoo! ( YHOO) Finance "Breakout" show that Bernanke has "absolutely left the door to open to more easing" and she expects to see it by September, despite this being an election year. She indicated that bringing on more stimulus so close to an election would be controversial, to say the least. Yet, Pepper says this is a secondary concern compared to the need for the Fed to emerge as a leader to Europe, if only symbolically. Would Europe follow the Fed's lead? She indicated, "Almost certainly not, but at least the FOMC will have demonstrably done what it can in response to the threat of recession."