A lot has been written already about the Cyprus fiasco, but we believe one more angle should be considered: that episode gave us only a little taste of what to expect when the Fed makes its next faux pas, the difference being that the drop down the elevator shaft will dwarf last Monday's tiny sell-off. The chart below shows what's at stake:

If history is any guide, the question should be when the Fed will make a faux pas, rather than if. Whether they initiate on their own a clumsy attempt to put an end to the perpetual QE, or whether inflation and the economy force them to do so, confidence in their ability to engineer a graceful exit is near zero.

In the meantime, enjoy the ride, as the daily, weekly and monthly trend for the SPX, NDX and DJIA remains up:

For those who worry about continuing spillover effects from Cyprus next week, the intraday SPY chart below points to the key levels to keep an eye on:

That's 1535 - 1560 for the SPX.