The market's action was dominated by the news coming out of Cyprus, which at first showed no signs of resolving its problems, pushing major averages lower. Later in the day the European Central Bank stepped in and said it will provide liquidity to Cyprus within existing rules which helped trigger an end-of-day rally. Futures are currently trading higher as investors wait on the Fed to release its economic projections at 2 pm EST today, the same time as it releases the policy statement. Fed watchers assume the Fed will continue its easy-money policy. This has enabled markets to continue to trend higher. That said, if the Fed's economic forecasts are more positive than expected, investors worry the Fed would end its ultra-easy money policy sooner, putting downward pressure on stocks. The markets remain in a highly news-related environment, and short-term movements may continue to rest upon on the outcome of events in Europe and the Fed's comments today.
While the SPDR Gold Shares (GLD) met the basic technical requirements for a pocket pivot buy point, it is just under its 50-day moving average and well below its 200-day moving average where it faces resistance after a five-month-plus downtrend. However, gold has a number of tailwinds currently and the GLD has found support along the lows of its 18-month consolidation.
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