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What You Need To Know: Rally Day Two



March 18, 2011 – Comments (0)

The markets moved higher again today on the back of G7 intervention in the currency markets as the Yen was pushed down and a no fly zone was put into place over Libya. The global powers are doing their best to quiet the issues in the world right now and allow for stability to return. The markets are reading these actions as positive and a rally for the second day is under way.  The SPDR S&P 500 ETF (NYSE:SPY) is trading at $128.16, +0.87 (+0.68%).

Today is also options expiration and often a positive day. The early portion of the week saw massive selling killing the call buyers while the second half of the week has seen a surge higher, taking money from the put buyers. This is classic options expiration whipsaw from the institutional players.

Commodities are jumping higher with gold and silver leading the charge. The SPDR Gold Trust (NYSE:GLD) is trading at $138.53, +1.56 (+1.14%) while the iShares Silver Trust (NYSE:SLV) is trading at $34.23, +0.72 (+2.15%). It appears that as the G7 intervenes in the currency markets, more people feel like currencies are not worth holding, thus buying gold and silver. Throughout history, intervention has rarely worked out for the best when it comes to the markets. It usually creates more problems down the line.

A majority of stocks are nicely higher with a few exceptions. Technology shares are slightly weaker compared to their counterparts in the S&P500 and Dow Jones Industrial Average. Worries surfaced again about Steve Jobs as rumors over him officially leaving the company surfaced. Apple Inc. (NASDAQ:AAPL) is trading at $331.77, -2.87 (-0.86%).

While the markets remain solidly higher, Wall Street continues to be nervous. Compared to a month ago, there are hot beds of major issues everywhere. The Middle East, Japan, Europe and more. This means traders will expect choppy wild trading for the near term as new information is constantly being priced into the markets.

Gareth Soloway

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