My wave count remains the same, it is either 'Option 1', 3-wave B as shown above or 'Option 2', 7-wave B as shown below. Hopefully the magnitude of the next pullback can rule out one of them.
The stock markets were being supported by excess liquidity in the banking system, thanks to the Quantitative Easing programs. The European Central bank is doing what the US has done by pumping 489 billion euros into the banking system last December. The spare cash in the banking system was 511 billion euros last Friday.
Click 'The Most Profitable bank in the World' to read, an interesting article from Seeking Alpha.
In 2011, Federal Reserve made $79 billion from interest payment to the Government and Agency bonds that it bought using money that it has created (by printing) out of nothing. The more it prints to buy over the bonds from the banks, the more money it is going to make and at the same times it provides excess liquidity to the banking system. Is this a big bubble in the making ??? What is the catch ???
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