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MLR - Premarket Pulse March 25, 2013

Major averages were up on mixed volume Friday. Both the major averages and leading stocks have made limited progress over the last few weeks.

Cyprus reached a deal early Monday so the ECB will continue to fund its banks which will prevent its exit from the euro zone. Futures moved higher on the news. Interestingly, end-of-day buying by big monied institutions was observed on Friday, thus they were placing bets that the Cyrus issue would come to resolution before Monday's deadline. Had Cyprus not reached a deal by the deadline, it would probably have made little difference to the stability of the EU since the ECB can print huge sums of money via quantitative easing. Of course, the more that is printed, the deeper the hole that is being dug, so the day of reckoning will be that much more potentially catastrophic. Futures are up this morning in response to the agreement, but are off their overnight highs. Ultimately the news simply staves off a potential sell-off in stocks as opposed to serving as some major catalyst for a big upside move.

Dutch bank ABN-Amro announced yesterday that they would not deliver gold to customers who have placed physical gold holdings in the custody of the bank, instead paying out cash at the current bid price of gold to customers in lieu of physical delivery. This is quite an interesting development, and the reasons for this are not clear. Speculation that this is due to a critical shortage of physical gold has not been confirmed by the price of gold itself, which is trading below the $1600-an-ounce level this morning, down over $11 at the time of this writing.

Breakouts in homebuilders last week went soft by Friday, with stocks like Lennar Corp. (LEN) and Pulte Home (PHM) pulling back in after rallies earlier in the week.

In general, there is little in this market that is actionable, as the market mostly treks sideways here going into the end of the first quarter of the year, thus investors remain in a holding pattern for now.

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