Any and all doubts about what the Fed would do have been resolved. The Fed launched QE3 with open-ended security purchases — “agency mortgage-backed securities at a pace of $40 billion per month” (more here). The market was clearly happy with the news. The S&P 500 dithered through the morning and bounced off the opening price at 12:30 with the news of QE3. The index hit its intraday high, up 1.89%, shortly before 2:30 PM. It closed a bit off the high with a gain of 1.63%, which translates into a 1.53% gain for the week thus far. This is a new interim high.
The index is now up 16.09% for 2012. From a longer-term perspective, the S&P 500 is 115.8% above the March 2009 closing low and 6.7% below the nominal all-time high of October 2007.
Here is a 15-minute chart illustrating the week so far with the Bernanke Blastoff as the key feature.
For a better sense of how these declines figure into a larger historical context, here’s a long-term view ofsecular bull and bear markets in the S&P Composite since 1871.
Images: Flickr (licence attribution)
About The Author
My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.
My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.
Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.
Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.