on 09/13/2010 14:24 -0500

The forced melt up higher once again resumes with no correlation to the recently prevalent Treasury butterfly, as whatever stat arb desks have not blown up in the September move are now once again correlating stocks exclusively with the AUDJPY in yet another chicken-or-egg catch 22. For those who prefer the comfort of a catch 33, we would be far more concerned why the butterfly has collapsed even as stocks are glued to VWAP as if with a tractor beam straight from Darth Vader's toilet. Of course, ES still have to close about a 25 point gap from earlier this month, when the ramp brigade just went truly apeshit. Daily divergences will close, but the real move will be when that particular gap with both the AUDJPY and the 2s10s30s is finally closed. Until then let's just all pretend we have a market. Here some may ask what's the point in fighting the Fed's almost daily stock ramping, and they may well be on to something: the

Thursday. You didn't think a politically "impartial" Fed would allow a market crash before the mid-terms now, did you?

The U.S.

Inc.

"We don’t expect this at the Sept. 21 meeting, but in November or December there’s certainly a possibility that it will be announced,"

, chief economist at the bank, said Tuesday. He added the Fed is likely to buy U.S. Treasurys worth around $1.0 trillion to kick-start the economy.