Traders: Here's what's driving the rally

It's been a good season for third-quarter earnings, with 70 percent of companies beating expectations. But some traders say bigger factors are driving the latest market rally.

According to Boris Schlossberg, while earnings have helped push stocks higher, the real reason behind the surge is the Federal Reserve deciding to keep rates low longer than expected.

"Earnings have definitely helped and they've been a really nice tail wind for the market," Schlossberg said Wednesday on CNBC's "Trading Nation." "They were the ignition that lit the fuse, but it was really the monetary policy that really let the market coast higher."

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In a testimony to Congress on Wednesday, Fed Chair Janet Yellen said raising interest rates in December is a "live possibility." Stocks fell slightly on Wednesday, but are up more than 1 percent for the week.

"I think it's the fact that we have accommodative monetary policy for much longer than the market thought really gave it the extra boost it needed in terms of liquidity to push it higher," Schlossberg said.

Todd Gordon of TradingAnalysis.com said even with the prospect of a December rate hike, he's still bullish on equities, in part thanks to other central banks keeping interest rates low.

"Though the Fed is winding down our accommodative policies, they're handing the baton internationally. Other central banks are taking care of it, and I think that's what the markets are resting on," he said Wednesday.

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Gordon also noted that previous outperforming sectors, such as health care and technology, are starting to lead the market again, which could be a good sign for stocks. The S&P 500 health care and technology sectors have risen about 1 and 2 percent, respectively, this week.

"I think we need to wait for a pullback to establish longs, but I do think eventually that strong sector leadership takes us to new highs," Gordon said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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