In a lot of ways, watching the S&P 500 surge 3.5% since the Fed announcement reveals a lot about the limits of Wall Street logic. Fear had gotten too far ahead of the fundamentals and now the market as a whole can get back to work.

For me, the factor that turned the Fed into Wall Street’s friend is extremely simple. Stocks that had once priced in perfection had started to price in catastrophe.

Traders had forgotten that real life is all about weighing the fine shadings of probability between perfection and catastrophe. People who get too wrapped up in thinking about binary events miss out on that.

In theory, every Fed decision is a binary event. Overnight interest rates will move or they won’t. People who bet the right way will be rewarded. Those who were wrong will pay the price.

But traders who spent months training themselves to dread this particular Fed decision quickly realized that it wasn’t the end of the world. The economy didn’t collapse at 2:05 ET last Wednesday when overnight interest rates edged up 0.25 of a percentage point.

And when you take that apocalyptic possibility off the table, a lot of stocks that had looked expensive even in a perfect world now looked cheap in a world that could obviously continue to function in a non-zero rate environment.

Are all stocks ready to rebound to record levels? Not at all. Key names like SHOP and ROKU haven’t even recaptured technical support yet. They’ll need time to go back and do the hard work of building their businesses to justify a return to their old record stock prices.

But they have time and they have nimble management teams who are willing to do what it takes to keep growth coming. Their cash flow metrics are not in the kind of free fall we would expect from looking at their stock charts.

They simply aren’t climbing as fast as some people hoped. And in some cases like NFLX, they aren’t climbing as fast as smart people on Wall Street expected.

It’s going to take them a lot more time to get back on track breaking records. Shareholders who bought the peak might need to stay patient for a year or even longer to see their holdings fully recover.

Some stocks are worth that kind of patience. Others are now best suited as short-term trades. Don’t buy them and hold. Buy the dips but sell the peaks, then wait for the next dip and do it again.

The market as a whole, on the other hand, seems to have shaken off its Fed dread quite nicely. Again, the big benchmarks were priced for something like the end of the world.

Because the world didn’t end, the NASDAQ and S&P 500 are now priced too low for where their constituents are collectively going.

Remember, the Fed sees zero sign of recession on the horizon. They’re only willing to fight inflation because they’re fairly confident in the economy’s ability to bear the weight of higher interest rates.

And while the geopolitics around Russia remain fractious, they aren’t visibly hurting U.S. companies. Back in January, Wall Street was looking for 9.3% full-year earnings growth for the S&P 500.

That was before the war. Before the oil shock. Now, the same analysts see 9.4% earnings growth ahead.

There are definite losers in a $100 oil world. The airlines, for example, are not going to have a good time even though the pandemic cloud is finally lifting.

But there will be winners too. And unless everyone on Wall Street is asleep, the winners will outnumber the losers in the current economic situation.

Let the Fed come in hard and strong to fight inflation. The banks will cheer every time lending rates rise. The airlines will rally in relief if it means fuel costs will go down.

And if economic developments play out differently from the way the Fed currently foresees, active traders will have plenty of lead time to get out of the way. A recession may hit in 2023 or beyond. That’s at least year away.

There’s always something worth buying. For weeks, traders were terrified of everything. Now we have some clarity to work with.