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Month after month and week after week, the market has popped one expectations that the Federal Reserve will do another round of Quantitative Easing. It seems as though every time the markets were on the verge of a collapse, a rumor surfaced that QE3 would be announced. Yesterday, it was...

The markets soared dramatically higher, making new 5 year highs on most of the indexes. Not only did the Federal Reserve announce QE3, but they said it would be unlimited until the economy was creating enough jobs and growth had come back dramatically. This twist on QE3 essentially shot the markets into the stratosphere for the day. The markets are slightly higher again today with the SPDR S&P 500 ETF (NYSEARCA:SPY) trading at $147.53, +0.83 (0.57%).

While the announcement took every last bear and turned them into a bull, from analysts to economist, even down to the little investor, I caution you with this small note.

The markets have rallied for the last few years because they always expected and anticipated another round of QE. Even over the last three months, every attempt at a market breakdown was negated because a rumor emerged of the next round of QE. However, now that the Federal Reserve has stated QE is unlimited, they have used their last bullet. If it is unlimited and the market expects that, there is nothing to drive the markets higher. This may have been a major tactical error on the part of the Federal Reserve.

With no possibility to have another round of QE announced (because it is unlimited now), what will be the driving force behind a continued rally in the market?

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Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com