SPX Weekly Chart Showing the Quantitative Easing Rallies Since the 2008 Crash

The Fed's QE rallies show the five wave formations. Note how the stimulus measures, as they increase all over the globe, are having less of an affect over time. QE1 was announced since the markets were in free fall early 2009. QE2 was announced since the markets were going over the falls in summer 2010. In July-August 2011 the waterfall crash occurred. Note the importance of the 200-week MA as support. The Fed announced Operation Twist to bounce markets, then the pink circle shows the pop when Chairman Bernanke announced low rates thru 2014. LTRO1 was announced in December 2011 which started the latest rally shown in teal, straight up from 1200-ish. LTRO2 has no affect since traders were told it would occur when LTRO1 was announced.

Note the negative divergence that identified and is identifying the tops. The MACD line is long and strong now so a move down to the 1350's then bounce back up to current highs again, then rollover, would not be unreasonable moving forward. When markets drop and the CRB drops under 300 that will indicate QE3 is ahead, but, as the chart shows, QE3 will only perhaps muster up a hundo spoo points as the law of diminishing returns occurs. The hope is that QE creates a wealth effect and helps jump-start the economy as folks buy more, then companies employ more workers and it becomes self-sustaining. As they say in Brooklyn, "Good luck wit dat." This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.