Stock Selloff Could Be Driven By Options Expiration
Stocks are sharply lower this morning on little news. There were a few economic reports, but nothing really market moving. My guess is that this selling could be related more to options expiration tomorrow. Often during expiration week, you get at least one big down day. I thought that after two down days this week already, that maybe that was all we were going to see on the downside, but that just goes to show you how difficult it is to try to forecast the market on any given day.
The dollar is also higher this morning, and that is as big a culprit as anything. Stocks and commodities are both lower on the dollar's rise, with gold trading down to $1136 and oil prices lower near $78.
Jobless claims were in-line this morning at 505,000, and the Philly Fed came in better than expected at 16.7 (vs. 12.2 consensus). The OECD see U.S. GDP growth in 2010 at +2.5%.
Asian markets were mostly lower overnight; the 10-year yield is lower to 3.32%; and the VIX is surging +11.6% to 24.14, which is a huge move and nearing its overhead 50-day resistance.
Trading comment: I have said that I wanted to be buying dips here, and since today's selloff looks to have little fundamental reasoning behind it, I am going to look for spots to put some money to work. The market is still coming off its recent overbought condition, but I think after that is alleviated, we could see another move higher.