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Chasing Ghosts: The Rally That Wasn’t There
For weeks, 4,200 on the S&P was bandied about by some top-down strategists as a "sell-the-rip" l
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Perhaps a naive question, but is there a strong and direct correlation between: (i) the big $’s being swung around by the “un-economical” CTA and Vol Control players, and (ii) the new $’s that were created via QE (…which, by and large, are still out there “circulating around”, even as new creation has ceased) ?
I personally don’t see a correlation, QE is basically an asset swap resulting in the creation of bank reserves with the Fed, so not sure how that would connect to CTA/systematic funding, there is a massive pile of institutional money floating around independent of QE even if QE might inflate financial asset pricing.