Already we see the bears saying "It's not enough" and "The math won't work."
What they don't understand is that The Fed is not trying to buy the whole economy. By using their monetary tools the way they are, The Fed is trying to get it through the heads of the people with money on the sidelines that it's futile to stay on the sidelines. Their goal is to convince the sideline money that they should put it to work or it will be lost to inflation and opportunity cost.
The goal of QE is not to push the stock market up, that's just the first and easiest place for money to flow. People who frequent the stock market understand that they must put money to work or lose it. They understand this first and act first so we see it in the stock market first.
be that in the stock market, the bond market, Venture capital market, Real Estate market, or the super market. And there's no shortage of problems or ideas to fix them in the world. You add to this the fact that Europe is taking steps toward fixing the structural problems there and it's a cocktail of future expected growth..
Sure, there's problems still but if you look around the world it looks a lot better than it did 6 months ago. Sideline money see's this first. the people waiting for the other shoe to drop are starting to see the other shoe is getting tied on tighter and tighter and may not drop.
The latest good news out of the housing sector is this week's MBA Mortgage Index jump. up 11.1% last week it shows that more people are signing up for mortgages. 80% of them were refinance but they are the smart money, they move first and point to more to come. So with housing getting better the Fed didn't have to do as much as they did the first two QE's. By making this one open ended they threw a curve ball to the quantitative folks that would otherwise put a time and date for when things will get bad again. They don't have that luxury but they'll try and find something bad to say.
All the problems aren't fixed but they're moving in the right direction. This will be understood by the sideline money sooner or later and it'll come up off the doe letting The Fed and the government fall back from supporting the economy, helping with the deficit also.
I think the banks are a screaming buy here as a better housing market helps them the most. Also housing related companies like furniture stores and hardware stores deserve a look. It's time to buy the dips and the rips (breakouts) traders.
Ignore the bears for now traders. The big Funds have no choice but to chase performance the rest of this year or get redemptions out the ass for missing out. Good luck, and happy hunting!