Last week, I posted here the major trigger for the market advance was due to the Quarterly Refunding Announcement (QRA).   For those unaware, the QRA is when the Treasury tells the markets how much issuance there will be and where it will take place along the curve (bills, notes, bonds).  As I have preached over the past several months, the QRA has become a focal point of traders due to the concerns developing in the longer duration (notes and bonds) due to a supply/demand imbalance from the massive amount of debt (leading to large issuance). The last QRA in July surprised the markets when Yellen announced that they would be  growing issuance at the long end of the curve which is primarily funded via bank reserves which serves to reduce liquidity (funds allocated to purchase debt versus risk assets).   Then on Wednesday, many traders were expecting Yellen to continue that trend of increased supply and longer dated issuance (many were positioned short SPX/TLT).  Instead, the QRA  showed a slowing of debt issuance along with more issuance dedicated to the shorter end of the curve (which is primarily funded via the RRP not Bank Reserves).  This led liquidity traders to reverse their positions on Wednesday pre-market.  Thus, Yellen provided the trigger (kicked the can so to say) with additional fuel coming from those liquidity traders reversing (buying risk assets) which creates a shift in structure (technical buy) which then forces the CTAs to reduce shorts/buy and the start of retail FOMO (see the chain reaction leading to a Breadth Thrust).   To summarize, the QRA ignited a rally in bonds (lower yields) which in turn leads traders to risk on (buy/ increase allocations of  junk bonds, stocks, gold, all risk assets).  This is simply all about positioning/flows which is also influenced further by money managers need to press returns for year end bonuses (greed is always in play on Wall Street). Remember my comments last weekend/ Monday about the fuel being present (sentiment, divergences, positioning) but a trigger was required.  Janet provided the trigger (ignited the rally) but kicking the can will not solve the problem longer term.  Remember the Fram Oil commercial? 

Ironically, these actions (easing Financial conditions) make the Feds job that much tougher as longer term yields drop back down (see chart below showing Financial conditions).  The is thus pressured to keep the Fed Funds rate higher for longer because of the easing financial conditions.  

Chart Source: Market Ear

Below is one article summarizing the importance of the QRA and it's impacts on markets.   Click on the QRA link directly below and read for further clarity.  

QRA

Update:  This is true for foreign markets as well - with the USD weakening you see investors (from around the world) allocating some funds to emerging markets (bonds and stocks),  One other thing is that Chinese liquidity has steadily risen since July (lag effect on equities some of which finds it's way to other markets).