Morning Bid with David Gaffen

For the time being, all rallies in U.S. stocks need to be met with skepticism. The market has not been able to sustain any kind of advance since the turmoil began at the end of August.

This is a weird market we’re in. Equities spent a good part of the day under pressure, rebounded late on what was attributed to a wonky note that took an inside baseball view of the recent selloff, fell, and then rose, after Federal Reserve Chair Janet Yellen first said explicitly that the Fed plans on raising rates, and then suffered a mild health issue that gave everyone a bit of a scare before doctors said she was okay to continue with her schedule.

The Fed has a lot of supporters among those who believe it wasn’t time to raise rates. Most primary dealers moved their expectations on a rate increase prior to the Fed meeting, the fed funds market was clearly signaling a very low chance of a rate increase, and plenty of commentators, domestic and international, expressed concern about the Fed moving rates at a time when it just wasn’t prudent to do so.

With great power comes great responsibility, as a wise comic-book character once said. And so the Federal Reserve’s decision this afternoon bears the weight of re-establishing credibility in its ability to shift policy in more than one direction, communicate to markets its thinking, and yet – if it raises rates – to soothe investors concerned that several more rate increases are in the offing. (The Fed has repeatedly said this isn’t the case, but who knows how markets interpret things sometimes.)

With corrective action that has been seen in the last several months (and yes, this correction should accurately be dated to May), it’s good to try to start somewhere when it comes to optimism. Jason Goepfert of Sentimentrader.com points out that total pink sheet activity as a percentage of the Nasdaq volume has dropped to levels not seen since the aftermath of the dot-com blowup.

Heading into payroll day, the more popular betting surrounds the Federal Reserve, and with it a discussion of whether a particular number or set of numbers will be strong enough or weak enough to move the central bank to boost rates in a couple of weeks.

The July meeting was never meant to be much of a thing with the Federal Reserve, and that’s exactly how it’s worked out. The Fed seems like it is still targeting a modest increase in rates in September, with – as many strategists have already noted – the real action to come later on down the road, as Janet Yellen and others have argued that the first move isn’t the one to really worry about.

The broad effects of the selloff in Shanghai are beginning to spread. Notably, during the U.S. session on Monday was when China’s regulatory authority said the state would continue to support the equity market, the ultimate in treating a symptom rather than a problem. Whatever happens to the equity market, a steady diet of share-buying by the state isn’t likely to be able to stem the losses.

This seems like a day best fit for Mad Magazine-style descriptions of what we’re about to see in the equity market. Suffice to say that in the past, the weak trend evinced in the quarterly stats for earnings growth were often restored to some sort of level people could live with once Apple figures were released.

The big Megillah of the market is out after the close, so naturally there will be a ton of scrutiny – and a ton of trading – surrounding Apple after the consumer electronics giant reports results and gives people an idea of how its signature iPhone and newcomer iWatch products are doing.