There are conspiracy theories floating around to explain the unexplainable rise in stocks. http://seekingalpha.com/instablog/4...is-the-fed-buying-stocks-to-reflate-the-banks Trim Tabs says the Fed has been buying stocks : http://www.fool.com/investing/general/2010/01/08/is-fed-buying-behind-the-stock-rally.aspx Something is definitely wrong with this rally since July. This type of action is unprecedented, retail inflows have remained very low. Where does the money come from ? Hedge funds have participated but they weren't in it for the long haul and are probably mostly out by now. Yet there hasn't been any correction. If the Fed bought stocks , how come that cannot be detected on their balance sheet, and how could they get away with it ? How would they go about doing this "through the banks" like some say they could have done ? Is there any evidence the big banks have loaded up on stocks ? What about a supposed $1 trillion of short positions last year that needed to be unwound and thus provided fuel for the rally ? Is that number correct ? Could it explain everything ? It seems to me that maybe a big part of it but my guess is by late summer something else was at play . And where is the retail selling ? I have been liquidating long term positions throughout summer , that was a mistake in hindsight but I am sure most long term retail investors have done the same and are still happy with it. Baby boomers would be nuts not to seize that chance to get out after the 2008 heart stopping drop . Because even if it goes to the moon, who wants to ever risk another drop like the 2008 one?