QE makes this a house built on sand, not on rock.
From Zero Hedge:
The only numbers that matter today are 16000, 4000 and 1800: those are the Fed’s closing targets for the Dow Jones, the Nasdaq and the S&P. Following last night’s Chinese euphoria which saw the Shanghai Composite surge by 2.87%, or up 61.4 to just under 2,200 on renewed hopes for Chinese reform by 2020, the Fed’s price targets should all be quite easily achievable.
And not even the rising home prices in 69 out of 70 cities year over year, and 65 over month - the same as last month, with new nome price inflation at 0.6% overall and 0.8% for the first tier cities, was able to put a dent in the reflationary spirits in the Mainland. Additionally, news that China would join the US and Europe in “adjusting” its GDP calculation method, which would add R&D expensing into the bottom line, and as a result boost the overall number, is, well, helping things.
Finally, with today’s POMO a rather whopping $3-$4 billion, it is only a matter of time before all three of the previously noted psychological resistances are promptly taken out by the Fed’s open markets desk.