Recently, I read an article which stated that quantitative tightening is the “death knell” to the stock market. Can this be true?

So, allow me to show you why this is just another market fallacy which has been propagated by market analysts and the general media, and then regurgitated from one investor to another until it has risen to the point of “fact.” However, at the end of the day, this too is simply “fake news.”

While I am sure it would seem “logical” to most people that if the Fed takes money out of the system that the stock market would certainly drop. This premise is based upon the common belief that the cause of the market rally was the Fed’s quantitative easing process. So, if you remove the cause of the rally, then obviously the rally will reverse.

But, is that what has happened? And, if not, shouldn’t we then question whether the Fed was the true cause of the rally to begin with? Let’s look at some of the facts.

In January of 2014, the Fed began to taper is QE process. So, the common expectation was that the market would suffer. Well, the market was at 1800 when the Fed began to taper, and then rallied to a high a little over 2100 (a 17% rally). It sure does not seem as though the market suffered from tapering. So, let’s look further.

In October of 2015, the Fed fully halted QE. And, as I am sure many of you remember, everyone was expecting a market crash. Well, the market was around 1900 at the start of October and then rallied to 2100 in that same month. Yes, you heard me right. What many were certainly expecting to be a majorly negative impact upon the stock market turned into a 200 point (11% rally) in one month upon the halting of QE. It sure does not seem as though the market suffered from the cessation of QE.

http://news.goldseek.com/GoldSeek/1538654640.php