Interesting table caught my eye. It indicates that most of the gains in the S&P500 since 2009 have occurred in the weeks when the Fed POMO (Permanent Open Market Operations) is buying up treasuries. Makes sense, since Fed buying is turns folks into bond sellers, and then once they have been flushed out of bonds they have to find a new parking spot for their money, so they put it into stocks. I know I'm over-simplifying the whole thing, but the correlation was striking.
Of course, one could argue that since 2009, the Fed has been buying treasuries, and stocks have
independently been going up during the same time; but if that is the case, then I would not have expected to see the WEEKLY correlation that we see here.
If the 'taper' comes next month, one could expect a slowdown in stock appreciation as well as lower bond prices; hopefully gold can save the day for the PP.
