Stock Market & Silver Price

It has been a fiercely ambivalent few days for the markets as players try to handicap evidence
of a global slowdown of economic growth as well as the prospective full significance of the
Fed's decision to wrap up QE at the end of June. Should players buy the US dollar and Treasuries
or stick with equities, commodities and PMs?

Oil and gold are selling well above trend support, but the SP 500 and the silver price are right
down on trend support and there could be negative follow through if stocks and silver break their
respective trends on the downside. You should probably watch the action with these latter two
for insight in the days ahead as they are at flashpoints.

As well, the release of initial unemployment claims tomorrow am may play a role following
last week's unexpectedly sizable increase. A very large drop in claims might be needed to
keep equities above trend, etc.

The weakness in commodities over the past several trading days is probably welcome news
for the Fed. A deceleration of headline inflation would arrest the decline in real incomes and
pressure on real transfer payments. This positive development would partly offset diminished
liquidity growth after Jun. 30 and, if there is enough of a break in the commodities markets,
it might strengthen the Fed's hand to bring on QE 3 for 2012 (an election year) if needed.
Just speculation mind you, but do not underestimate the depth of Bernanke's economic and
political concerns in a sharply divided Washington.