But if you tell me QE is going to be removed over 9 or 12 months, that's a big deal because it's my belief that QE has subsidized all asset prices and when you remove that subsidization, the market will go down.
The minute you have this phony buying stop, it can go down on no volume and it can just reprice immediately. I personally think as long as this game goes on, assets will stay elevated. But when you remove that prop - and let's face it, the Fed has said they are targeting asset prices - those prices can adjust immediately."
You can see that the market is already starting to price in some kind of stimulus reduction. The Volatility Index ($VIX) is moving higher and the S&P 500 is testing an important support level.
Also, this chart of the S&P 500 that John Hussman, President of Hussman Investment Trust, keeps posting doesn't look like it will end well. It's probably a good time to own put protection to hedge against a severe correction.
|Source: Hussman Funds|
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