MLR - PMP 2/24/14
Stocks fell slightly Friday on mixed options expiration volume. Over the past several days the indexes have merely moved in sideways fashion as they digest the sharp move up off the early February lows. The Fed will reduce its bond purchases by $10 billion until QE is over, assuming the economy improves, while the ECB and Bank of England continue to keep the status quo in terms of quantitative easing. The Bank of Japan also reduced levels of QE. Commodities seemed to have turned a corner, with the Commodity Research Bureau (CRB) Index breaking to the upside in the last few weeks, reversing a downtrend which began in 2011. Precious metals gold and silver are also rallying, with both gold and silver ETFs, GLD and SLV, trading above their respective 200-day moving averages. Gold is currently trading at a 4-month high above $1330-an-ounce while silver is pushing the $22 price level. This implies that the global economy is on the mend and that should it sputter, QE will act as a safety net of sorts. Thus the markets are seeing the glass as half full instead of half empty given price/volume action of the major averages and commodities.
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