Thursday, September 13, 2012
What Happened the Last Time the Fed Announced QE?
The S&P 500 is up 1.2% currently following the announcement of new QE. This is not unlike the pattern that we saw in 2010 where the market rallied out of the summer on the expectation that there would be more QE and rose again on the day that QE was announced. However, over the next 8 trading days immediately following the announcement of QE2 the market fell 4.4% as it consolidated. It then continued to rally for about 2.5 more months.
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