Yes, the rising tide of liquidity raises all boats. Equities first and foremost.
But then the reality of the distortion sets in. People try to evaluate what's next.
Eventually all the liquidity needs to find a rational place to rest.
The dollar's next support seems to be 072.
What is a rational person to do with the recent run-up in equities, dead-money real estate, a new trend of rising long rates and a USD on the precupice of free-fall?
After hinting at some movement over the past 12 trading days, Dow-gold relative strength is showing very strong signs of a turn, and a re-turn to the typical negatively-correlated relationship. On Wednesday the Dow goes south and gold goes up in a big way. Ditto for today, Friday the 20th.
Wednesday is a big day. Excess liquidity is looking for a safe resting place.
http://stockcharts.com/h-sc/ui?s=%24gold%3A%24indu