June 20, 2008
Freaky Friday once again reveals itself on options expiration day. These days always tend to be volatile and it was no different today. Oil went back up (no surprise) and credit problems continue to cause ulcers for Wall Street. Back in January we had to deal primarily with the credit woes plaguing the economy, but now we have a two-headed monster to deal with: a combination of surging oil prices that appear to have gotten out of control and has subsequently affected all sectors of the economy, and the second head being the renewed fears that more is to come in the credit crisis, thanks to reports like Goldman Sachs, and others along with the possibility that Lehman Brothers could be the next Bear Stearns catastrophe.
If one or both don’t get resolved soon or at least the fears associated with each, alleviated to a degree, than any long-term legitimate rally by the bulls is out of the question, and if these problems persist, then the lows established in January and March earlier this year, will only be a pit-stop to new lows.
Here’s the NASDAQ and S&P Charts…