So what about this fact:
The Dow Jones Industrial closes today with a gain of +1.96%
The EUR closes today with a gain of +1.89% against the USD
So here might be the new equation of the markets:
perf(Dow Jones Industrial) - perf(EUR/USD) = 0
Talking about a bull market? Seems like investing in the Eurozone is making sense, as per my previous posts on the PER of the indices.
But I think it's interesting to note that the bond market is substantially lower than when Bernanke would like to be, and the markets finished by realizing that he was bluffing (hopefully, he was bluffing!). The 30-year Treasury (aka Long Bond) is now yielding about 4.3% which is going to drive the cost of borrowing the Obama administration a lot higher. So Ben Bernanke is now stuck. He can either kill really quickly the US dollar and reduce borrowing costs. Or he can leave the Long Bond fall, and the USD will have a slower death.
So we might pretty soon, depending on the actions of Ben Bernanke, avec new version of the equation:
perf(Dow Jones Industrial) - perf(EUR/USD) << 0
Wait & See...