The "QE3 Indicator"

Someone forwarded me a Citi research note about their "proprietary QE3ON indicator," which "tracks the likelihood of the Fed moving on QE or a liquidity injection."

It is hilarious that they have a "QE3 indicator." That tells you everything you need to know about what drives the market. They go on to say,

"We believe that the Fed is standing on the sidelines prepared with liquidity to replace any that is destroyed but market conditions are not quite yet at the point where they do that. A continued fall in equity markets, taking the SPX down to the 1100 liquidity put region, would likely spur the Fed into action."

Of course, their indicator merely addresses the perceived need for liquidity without addressing the constraints, e.g. $100 oil.