Wednesday, October 22, 2014

Could end of QE3 send the markets down 20 percent ?

I want to remind readers of a message that may be buried in the past:

When QE1 ended the S&P 500 fell just under 20% in a roughly three-month period before the QE2 recovery. 

When the QE2 ended the S&P 500 fell about 20% in a three-month period before the next Fed-inspired bounce (aided by the ECB). 

QE3 is ending this month. The S&P 500 peaked in the low 2000s in Aug/Sept. So, -20% and three months would take us to 1600 by late November.