I've been wondering whether QE3 has been underway in the name of the Operation Twist. The Yield Curve is a dead giveaway.
First of all, the Fed IS the yield curve.
Now, the SPX suffered a loss of more than 100 points from the day of the announcement of OT (Operation Twist), Sep. 21,2011, through Oct. 3, 2011, at an average loss of 11 points a day. Other things being equal, that's the message from the market to the Fed about OT. However, the operation's working as it's intended up to that point.
Of course, the Fed gets it. After all, the real mandate of the Fed is to sustain the stock market. And, the yield curve flipped, and the stock market rallied. And, technical indicators rendered useless, as they're mostly oscillators.
Edited by TechMan, 04 February 2012 - 10:18 AM.