1. Bernanke BonanzaForget fundamentals. Stocks now run on "Ben"-damentals. Or "Fed"-damentals. Or whatever stupid name you want to call the wackiness that consumed traders on Wednesday. Traders started Wednesday in a sublime mood, bidding up equities on the heels of Federal Reserve Chairman Ben Bernanke's prepared statements ahead of his appearance before Congress. In the text of his testimony, which built on similar comments made by St. Louis Federal Bank President James Bullard the previous day, Bernanke said he remains supportive of current monetary policy, arguing that pulling-back on the bank's stimulus measures wouldn't be prudent. "A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," read Bernanke. Translation: Party on dudes! Tap another keg David Tepper, because you're old buddy Ben ain't done easing just yet. Well, at least that was the market's read until around 10:30 a.m., when the S&P 500 abruptly fell from its record high of 1687. Why did traders turn tail and start selling at that particular time? What changed? Was it an earnings report from a Dow component? An exogenous Middle East event perhaps? Nah. It was just Bernanke getting peppered by lawmakers about the pace of his $85 billion a month bond buying binge. And when Ben said he could conceivably curb QE within the next few meetings if the job market shows "real and sustainable progress," the unabashed buyers turned into slam-the-bid sellers. Yes, all it took was a few hypothetical words from gentle Ben in Washington to scare the stuffing out of all those big, bad bulls on Wall Street. But that wasn't all. Bernanke may have spooked the cattle, but his friends at the Fed really started the stampede. Once the Federal Reserve's minutes from its latest policy-making meeting were released at 2:00 p.m. on Wednesday, the selloff gained momentum on word that that a few Fed members were willing to scale back on monetary stimulus as soon as June. The S&P, which was up around 1% before Ben's 10:30am jolt, finished down 1% on the day.
"A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome," the minutes said. Translation: Crap! Ditch the beer guys. My parents just called. I'm not exactly sure when, but they are coming home much sooner than I thought. Worst of all, they are bringing along Nouriel Roubini and there's nothing we can do about it. Well, at least not until Ben Bernanke opens his mouth at his next public appearance on June 19th. Then we'll all have a clue what to do next. -- Written by Gregg Greenberg in New York. Follow @5gsonthestreet