By Gareth Soloway on June 18th, 2010 2:18pm Eastern Time
Apple Inc. (NASDAQ:AAPL) took the Nasdaq on its shoulders and helped it move higher for the week. While many are wondering if we will have a double dip recession, Apple said who cares! The stock hit new a new all time high on Thursday and then again on Friday topping out at $275.00. Recession what? Keep a close eye on the market next week overall. This was options expiration week and institutions no doubt propped the market up to make sure they did not have to pay off the puts. Next week will give a true picture of the market. Apple is short term extended but may have its eyes on $300.00 if the markets move higher next week. While it is tough to go long at these levels, it seems to be too strong for a short as well. Neutral is the best way to play it. To get more indepth analysis, swing trade alerts, education and more, join the Research Center!
Gareth Soloway
Chief Market Strategist
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By Nicholas Santiago on June 17th, 2010 3:17pm Eastern Time
Today the major indexes have traded all over the place. The SPDR Dow Jones Industrial Average (NYSE:DIA) and the Powershares QQQ Trust (NASDAQ:QQQQ) have been positive at the open then negative shortly later only to trade back to the unchanged level on the session. This king of action is due to the institutional games that get played during the week of options expiration. This is also a quadruple witching expiration that includes the expiration of stock index options, stock index futures, stock options, and single stock futures. Therefore, a lot of games will be played this week into the close on Friday.
Just think of how many put options were bought around the June 6th lows. The institutional money knows this and will move stocks away from the popular strike price to make the near term contact expire worthless or out of the money. After such a big rally on Tuesday many small retail options traders probably had to close out many of their put positions. Traders and investors must always take it easy during this week of expiration which is always the 3rd Friday of the month.
Look at the activity in Goldman Sachs Group Inc (NYSE:GS) today. The stock has been all over the place. It rallies during one hour and completely reverses its gains and trades negative during the next hour. Welcome to options expiration week. Join the Pros and learn to profit from it!
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By ITMS News on June 17th, 2010 10:35pm Eastern Time
BP Thursday night reported one of its highest yet rates of oil retrieval from the relentless oil leak in the Gulf of Mexico. Slowing down the flow, reserve funds, etc, but when will we hear that they have finally STOPPED it!? Attempting to aid in relief efforts Wells Fargo & Co. was the latest mortgage issuer to offer loan relief to borrowers hurt by the huge oil slick spreading in the Gulf of Mexico. This appears to be only the beginning of an arduous coming of days.
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By Nicholas Santiago on June 18th, 2010 10:01am Eastern Time
This morning the markets have opened slightly higher as the U.S. Dollar Index is trading flat on the session. The U.S. Dollar Index is unchanged at $85.68. When the dollar is flat the market will usually hold steady or even catch a small bid. It is when the dollar rallies that the markets deflate and pullback. The U.S. Dollar index topped out on June 7th, 2010 at $88.70. It has since pulled back sharply and is now trading at $85.69. Obviously you can see the rally that has occurred in the stock market indexes since that time. The stock market will usually trade inverse to the dollar. The only time the dollar does not effect the stock indexes is when the volume is extremely light.
This morning most leading commodity stocks that will trade inverse to the dollar are flat today. Stocks such as Cliffs Natural Resources (NYSE:CLF), and United States Steel Corp (NYSE:X), are both trading basically flat. Until the dollar makes a move the stocks will likely remain this way. Remember when the dollar declines commodities and inflationary stocks will inflate and vice versa should the dollar rally these stocks will deflate. Remember the dollar is still one of the most important charts for traders and investors at this time.
Get in-depth analysis, along with exact entries/exits, swing trades, and scalp trades, join our Research Center or Intra Day Stock Chat NOW and enter the ranks of the Pros!
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USD INDEX hits a low of 85.45, as the risk rally extends US equity indices well above their 200-day MAs. A monthly close below 86.50 will prevent the index from posting a record 7 monthly increases. While we did see a EURUSD close above $1.2370, we've yet to see a weekly close above that level. The FOMC announcement will maintain the low rates mantra, which will likely help stabilize equities unless event risk from credit rating agencies reemerges. Ashraf is in South Africa for the World Cup so updates are minimal. Enjoy !
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By Gareth Soloway on June 17th, 2010 12:40pm Eastern Time
Ugly is the only way to describe the economic news out today. However, the markets are refusing to fall more than slightly due to options expiration and light volume. For those of you that are somewhat new to the trading world and the manipulation of options expiration, please let me explain. Institutions, which control 90% of the volume in the market sell the options to the public. They make a premium on the option when they sell it. To maximize profit, it is best if the given security expires worthless (out of the money). Then the whole premium is made as a profit. Over the last six weeks the markets have sold sharply. The retail investor got caught up in the moment of panic and bought puts. As many more puts were bought than calls, institutions have a reason to push the market up going into options expiration to have those puts expire worthless, thus maximizing profit. This explains why the markets often move the opposite way into an options expiration and also why negative news is not driving the markets lower.
Today there were three very negative economic reports. The markets are just barely negative on them. First, at 8:30am ET, Jobless Claims were reported at 472,000. The market expected a much smaller number. Jobless Claims above 450,000 continue to tell us there is no job growth out there and the unemployment rate will stay high if not go higher.
At 10:00am ET, Leading Indicators and Philly Fed were reported. Leading Indicators came in at .4%, weaker than the .5% the market expected. The far more shocking number was the Philly Fed. It came in at 8 after last months reading of 21.4. The market had expected a number of 20. This is a shocking miss and one that normally would drop the markets sharply. However, on the light volume of options expiration week, the markets are just slightly lower. The SPDR S&P 500 ETF (NYSE:SPY) is down $.46 to $111.50. That is a drop of .40%
Credit card companies like Visa Inc. (NYSE:V) and MasterCard Incorporated (NYSE:MA) are one of the few positive points of strong action today. They are surging after positive comments were made.
The commodity stocks are the weak are of this market today, most likely on the back of the weak economic news. A weaker U.S. economy means less demand for commodities. The United States Oil Fund LP (ETF) (NYSE:USO) is down 1.15%.
Gold on the other hand is surging to the 52 week highs. Gold will most likely continue higher as the printing of money shows no signs of stopping in a weak economy. It seems as if pullbacks can be bought. To get more insightful guidance, education and of course the profitable swing trade calls I am famous for, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.comRead more…
