In my September 13 2011 blog, Sensex  bottom target : The UPA gap I had written that the Sensex will bottom between 12000 to 13000. I had also draw parallels between the Great Depression of the 40"s  and the present recession. But instead from a low of 15175 on 20th December the Sensex went to 18428 ( Feb 21) in a span of 2 months ( Jan and Feb.) A return of 20/50% in most A group stocks. What Happened? A. Post Lehman collapse in 2008 ( corresponding to 1938) the Liquidity gush provided by QE1 and QE2 sparked the Equity + Commodity + Bullion rally. ( Dollar carry trade) Waning of the effects of QE lead to the declines in 2011 ( corresponding to 1940) B. LTRO ( Long term refinancing operations of the ECB): First round of 500 Billion Euros in Dec /Jan and Second round due on Feb 29 expected to be again of 500 Billion Euros. The Euro carry trade now, leads to Global equity + Crude  rally. This will lead to a peak  ( corresponding to the peak between 1940 /...