The Power of 'Excess Liquidity'

$SPDR S&P 500 ETF (SPY.US)$ $S&P 500 Index (.SPX.US)$ Just early last week, when most market participants were convinced that we were on the brink of a market correction, I highlighted to members of my community the power of excess liquidity. The Bubble of Liquidity demonstrated itself again this week when the markets surprised many investors by having one of the biggest rallies in months, delivering solid gains. The S&P index closed last week up 1.8%, its best week since last July. The Nasdaq was up by 2.2%, and the Russell small-cap index was up by 1.5%.