Sunday, August 24, 2014

To QE Or Not To QE

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As I stated one week ago the Nasdaq was poised to make fried chicken out of any bears trying to call a market top.  And sure enough, the Nasdaq rose to a 14-year high last week.  Never mind that weekly volume came in at its lowest level in 2 months.

The QE market remains undeterred by what seems to be lack of buying interest (as measured by volume), on going geopolitical risk, and the U.S. labor participation rate at a 36-year low.  The $1 question rapidly approaching markets in October is, how closely tied is the Federal Reserve QE policy to stock market performance.

To paraphrase William Shakespeare: To QE or not to QE...that is the question!