Authored by Lance Roberts via RealInvestmentAdvice.com,

The "Fed put?" Exactly, what is it, and where does this mythical support reside?

It isn't surprising with the rough start to 2022, investors are hoping the Fed will look to stabilize financial markets. Of course, after more than a decade of monetary interventions, investors developed a "Pavlovian" response.

Classical conditioning (also known as Pavlovian or respondent conditioning) refers to a learning procedure in which a potent stimulus (e.g. food) is paired with a previously neutral stimulus (e.g. a bell). What Pavlov discovered is that when the neutral stimulus was introduced, the dogs would begin to salivate in anticipation of the potent stimulus, even though it was not currently present. This learning process results from the psychological "pairing" of the stimuli.

Importantly, for conditioning to work, the "neutral stimulus," when introduced, must be followed by the "potent stimulus," for the "pairing" to be completed. For investors, as each round of "Quantitative Easing" was introduced, the "neutral stimulus," the stock market rose, the "potent stimulus."