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Options Expiration Week: Whipping The Little Players

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October 17, 2011 – Comments (0) | RELATED TICKERS: DIA , SPY , QQQ

Options expiration week has arrived. This is notoriously a wild week for stocks as institutions whip the markets up and down, shaking out the weak handed option holders. The markets usually run the opposite way of the recent trend. In the last two weeks, stocks have staged one of their best rallies in recent years. The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) jumped from a low of $103.84 to a high last Friday of $116.35. This was a gain of over 12%. The SPDR S&P 500 ETF (NYSE:SPY) jumped 14% and the PowerShares QQQ Trust, Series 1 (NASDAQ:QQQ)  shot up a total of 16%. After such monstrous gains, institutions will want to whip the small investor out of their call options. This tells us it is likely the markets will pull back this week.

In addition to the options expiration factor, the Dollar hit a major support on the daily chart. The PowerShares DB US Dollar Index Bullish (NYSE:UUP)  kissed the 50 moving average on Friday. Today it is inching back up. A stronger Dollar yields a weaker market.

Most stocks are seeing red today. However, Apple Inc. (NASDAQ:AAPL) continues to push higher. Today it hit a new 52 week and all time high at $426.70. This run is based off of earnings expectations. Tomorrow after the close, AAPL will report their quarterly results. Expectations are high, thus the stock price continues to inch up.

Gareth Soloway
InTheMoneyStocks.com

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