A well-regarded US-based equity analyst had this to say about the preceding chart:
Here’s a surprising tidbit: if the S&P 500 Index were to finish lower today, it would mark the 10th negative performance in the last 16 sessions. Yet, we are 1.9% higher than we were 16 sessions ago as of 12:20 p.m. this afternoon. You don’t need real buyers in a market like this. You can just be long, go to sleep, and wake up to find your shares re-valued higher…
We’re still below that peak today, the September-October rally notwithstanding. Greece blew up; other European sovereign debt markets had a bucket of cold water thrown on them; and, the U.S. economy slowed along with productivity growth (see last page for the chart). The Fed, recognizing that the economic recovery and the market rally were slowing, stepped in with a de facto promise to prop things up. That’s where we stand today.
Open Mouth Operations work. Don’t underestimate the power of printing money.