I think we're seeing the paid to play (mo-mo) crowd ramp the end of the year. Once the calendar turns, all bets are off.
Again I'm long CTIX because news should trump a general market correction and I'm looking for a hedge in addition to setting up my short package in the near term.
QE ended in November and the markets are running on fumes. As a history lesson, shortly after QE1 ended the stock market sold off 13% and the economy tanked. Then the Fed rode to the rescue and implemented QE2, when that ended, the market sunk 16% in just a few weeks which then led to Operation Twist and that led to QE3 (which is the biggest money expansion to date). In October, as QE3 was scheduled to end the markets started to take a dive and the Fed had to come to the rescue again. James Bullard of the St. Louis Fed came out and said that maybe they shouldn’t stop QE and probably wouldn't but that decision would need to be studied. That led to what smart money is calling the "Bullard Bounce". In the end money printing does not work.
The great Austrian economist Ludwig von Mises stated: "The final outcome of credit expansion is general impoverishment". Von Mises also warned that the boom can only last as long as the credit expansion progresses at an ever-accelerating pace. That’s why the Federal Reserve is unable to get out of this.
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