The markets were slammed again today on this options expiration week. The SPDR S&P 500 ETF (NYSE:SPY) are trading at $118.05, -1.98 (-1.65%). The markets are seeing the ugly side of Europe again which is causing the Dollar to spike higher. With Ireland on the verge of collapse, the Euro has fallen, inversely, the Dollar has moved higher. This is going directly against what the Federal Reserve has been hoping for in terms of keeping the asset bubble intact with a weak Dollar thus making the average American feel they are richer. Commodity stocks are the hardest hit today with major players in the Dow Jones Industrial Average like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) both dropping two percent or more.
The key to this week is two fold. First, last week a major cycle turn date hit which coincided with the top on the market. Since that cycle date hit, the markets have dropped sharply. Second, this is options expiration week and institutions will push the market in whatever direction they need to maximize their profits on the options they sold. Most likely, they are looking to wipe out the call option holders early thus the sharp sell. While the Federal Reserve is conducting the second quantitative easing, the markets are not being propped up like normal. This is most likely due to the fact the institutions receiving money for treasuries are not putting it into the markets because of options expiration and wanting the markets to fall. Understand it is a rigged game folks. Learn the game and profit.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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