Dow Surges 400 Points After Fed's Bullard Prevents Plunge With QE4 Bluff

It never gets old... if this sell-off was triggered by a realization that the consumer is truly depressed (retail sales) and the Fed is almost done, then the face-ripping rally (notably on weak volume) of the last 24+ hours is the ugly truth that the 'market' is always and everyday a function of central-bank bullshit. Since Bullard's "QE4" comment (strengthened by random headlines on Yellen's "economic confidence" and ECB Coeure's "QE any minute" comment), the Dow is up 400 points, S&P up 70, and Trannies up 3.5%. Small Caps are now up 3.5% on the week and 30Y Treasury yields only -2.5bps on the week.

Since Bullard's Bluff...

 

Bear in mind this is almost a 50% retrace of the drop (dead cat?)

 

and on the week Small Caps are squeezing higher...

 

Double-whammy...

 

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Of course what everyone forgets in this exuberant bounce is that the higher the Dow/S&P rise, the lower the probability of QE4... game-theory that!!

Simply put - meet the Data-Dependent-Dow (tm)

Charts: Bloomberg