U.S. Markets open in 2 hrs 13 mins

S&P 500 Tops 1,700 for First Time Ever

S&P 500 Tops 1,700 for First Time Ever

It's hard to believe, but the S&P 500 (^GSPC) went six entire sessions without hitting a fresh, new all-time high. But thanks to the Fed's dovish assessment of the economy Wednesday afternoon, traders were given all the incentive they need, and took out the psychological 1,700 level - and then some.

In the meantime, with the risk of the Fed tapering its bond purchases put off, investors have at least a seven-week window of opportunity until the central bank's next meeting on September 17th and 18th.

"I don't think it's going to be the last time we say 'all time high' this year," says Jeff Kleintop, chief market strategist at LPL Financial in the attached video. For the record, he's targeting 1,750 for the S&P 500 this year, but thinks that upside will carry more volatility with it going forward.

Officially, the big change in the Fed's economic assessment was that it now says growth in the first half of the year was "modest", where previously it had said it was "moderate."

There was also references made to the impact and threat that rising mortgage rates could have on the recovery of the housing market, as well as a mention about deflationary risk, since inflation continues to be well below its targeted two percent threshold.

"That's how the Fed communicates. They just change one or two words and you almost have to get your Fed decoder ring to figure out exactly what it means for the markets," Kleintop says.

It is widely expected that the Fed will make its first move to start scaling back its $85 billion of monthly bond purchases at the September meeting. First, because it will be a quarterly meeting, there will be updated FOMC economic projections as well as a press conference. And second, tapering may be more likely because of yesterday's better than expected Q2 GDP reading, as well as the probability that Friday's payroll report won't be a disappointment either.

"I still think we're on track for tapering in September," Kleintop says, "and probably wrapping up sometime in the middle of next year."

For now, the rally that started June 24th in the aftermath of the last Fed meeting is showing no signs of collapsing, and is quickly closing in on the 10% mark.

More from Breakout:

J.C. Penney Can’t be Saved: Najarian

European Rally Has Room to Run: Josh Brown

The Secret Sauce in the July Jobs Report