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ECB QE HELPS MARKETS RALLY

|Includes: AAPL, BZF, COST, DJP, EEM, EFA, EMB, EPI, EWA, EWG, EWI, EWZ, FXE, FXI, FXY, GDX, GLD, GPS, HYG, IBM, IEF, IEV, iShares Russell 2000 ETF (IWM), IYR, IYT, JJC, JJG, LQD, QQQ, RSX, SKS, SLV, TJX, TLT, UGA, USL, UUP, XLB, XLF, XLI, XLK, XRT

 
 

Stocks, commodities and currencies rallied after the ECB's (European Central Bank) outgoing President Jean-Claude Trichet indicated the bank would restart bond buying and long-term financing operations in the euro zone. This is QE or Quantitative Easing euro-style. Traders remember how well this helped U.S. stocks one year ago so they climbed aboard the bullish train continuing the short-squeeze from late Tuesday.

The rally is clearly the HFT algos at work and only reviled when markets decline but little mentioned on rallies. Nevertheless these volatile program trades are causing many investors to flee markets as noted inthis article. In fact, nearly $200 billion has been withdrawn from equity mutual funds since 2010 according to the ICI (Investment Company Institute).

 

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