The markets are flat on the day after a solid gap lower. Today is another POMO (Permanent Open Market Operation) day by the Federal Reserve. This information can be found on the New York Federal Reserve website and is known for helping the markets rally off their lows. The Federal Reserve infuses money into the system to be used to help prop up equities. The SPDR S&P 500 ETF (NYSE:SPY) opened at $118.10, -$0.60. After initially selling off lower, the Dollar began to drop, saving the markets and lifting them back towards the flat line. In addition, International Business Machines Corp. (NYSE:IBM) announced a $10 billion buyback. With IBM being a key component of the Dow Jones Industrial Average, the markets surged on this news. After POMO, the Dollar dropping off the highs of the day and the IBM news, the SPY is trading at SPDR S&P 500 ETF (NYSE:SPY).
Remember, the markets have a very low probability of selling off prior to the elections and the Federal Reserve meeting next week. The market will most likely be held up into the elections and the markets are also waiting to hear how much QE2 (quantitative easing round two) the Federal Reserve will do.
Chief Market Strategist