What Is The Fed's Updated Year End S&P500 Price Target?

We predicted (correctly) over a year ago that the Fed's balance sheet would reach the $4 trillion mark by the end of 2013. It took the world a few months to totally buy into the fact that all that matters is the flow from the Fed's POMO but, as the chart below so humbly suggests, with a 0.95 correlation (if its not causation, we're at least on the right path) in proclaiming that for every $3.25 billion printed by the Fed the S&P 500 index will rise by 1 point. Last week, we noted the 'dip' from Fed-based "fair-value" that the debt-ceiling debacle had driven in stocks and in just a few days, that 'pent-up-demand' has all but equalized stocks to the only valuation metric that matters - the S&P 500's Fed Level-Adjusted-Balance Sheet-Indicator-Aggregate...

 

It seems, if our extrapolation of the Fed's balance sheet is correct - i.e. no Taper - that the S&P 500 Fed L-A-B-I-A should be around 1800 by year-end.

 

(h/t @Not_Jim_Cramer)