Eoin Treacy's view We have described the rally that has been in place since early 2009 as liquidity fuelled because while the rebound from deeply oversold levels was to be expected, the impact of monetary stimulus on a previously unimagined scale has been one of the primary drivers of the advance subsequently.

Lest one doubt the impact of the Fed's quantitative easing on asset prices, this chart, depicting an overlay of the S&P 500 with the Fed's balance sheet has a striking correlation; 0.067 over the last 12 months. The Fed's balance sheet continues to expand as it ploughs $85 billion a month into Treasuries and mortgage securities and enough of this additional cash is making its way into the stock market, in one way or another, to allow the bull market to persist.

A rumour was related to me yesterday by a hedge fund manager based in San Francisco that one of the regional Fed governors quipped at a meeting in the city that the Fed would start tapering when the Chicago Cubs next win the World Series. In other words, it would be a long time. With speculation mounting that the Fed will not taper until March at the earliest, the monetary tailwind remains a significant bullish factor which is likely to limit pullbacks to partial reversions to the mean represented by the 200-day MA.