Pressure Building on Big Ben

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NEW YORK (TheStreet (TST)) -- Judging by the action so far this week, Wall Street evidently believes Ben Bernanke is the man with the plan.

NEW YORK (TheStreet (TST)) -- Judging by the action so far this week, Wall Street evidently believes Ben Bernanke is the man with the plan.

After all, even the odd earthquake on the East Coast couldn't derail the buying.

The contrarian view is that stocks were oversold after the bloodbath of the past four weeks, and there's some easy hay to be made running stocks up a bit ahead of the Federal Reserve chairman's speech on Friday.

Capital Economics on Tuesday was one of the many voices this week talking about the diminishing returns to be expected if the central bank embarks on more fiscal stimulus.

The research firm said it would be surprising if Bernanke didn't at least mention the prospect of more quantitative easing as a potential policy option but investors shouldn't expect the stock market to respond as it has in the past.

"The failure of the economy to regain health over the past couple of years should have undermined investors' confidence in the medicinal properties of QE," Capital Economic wrote, adding later: "There is little reason to expect it to warm in the event of QE3 unless the Fed acted much more boldly than it has in the past."

The Dow is now up in six of the past nine sessions and has booked a gain of 3.2% already this week. It'll be interesting to see when the bets start getting hedged ahead of the Fed chairman's ascendance to the podium in the shadow of the Grand Tetons. It's a good bet that there's still some room to run given the strong buying into the close on Tuesday but the fundamental concerns that have spurred all this volatility of late haven't been allayed.

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