ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So, David, that's supportive for stocks then, right?

DAVID KOTOK, CUMBERLAND ADVISORS, (ENGLISH) SAYING:

Sure. Well, if the Fed is in the market, buying longer term Treasury notes and bonds, not 90-day bills. If the Fed now owns long term Treasury paper, not short term Treasury paper, what the Fed has done is take duration out of the market and put it on the balance sheet. That means long duration assets like stocks, real estate, remaining bonds, municipal bonds, all kinds of securities and investments rise in price because of this wonderful buyer that has the unlimited capacity to pay. And as long as that party continues and the deficit shrinks, this is an upward bias to asset prices and that includes stocks.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

But David, what about the fact that earnings growth for Q4, if you look out right now projected to be up about 1.6%, from the S&P 500, I mean that's worse than what we're going to see in this quarter. So what about those fundamentals? Where does that put stocks in terms of valuation right now?

DAVID KOTOK, CUMBERLAND ADVISORS, (ENGLISH) SAYING:

Well now, you're into sectors and industries. For example, if you look at certain transportation sectors, they're doing very well; rail. If you look at certain sectors- Bank of America today, surprisingly good numbers; the markets like it. So you have to pick and choose your spots on this one. That said, general market themes have an upward bias and the alternative cash earns zero and is likely to for the next several years. So when you compare options, stocks come out winners.