Options Expiration May Be Feeding the Selloff

Looks like the collective wisdom of the market is that the green shoots are turning brown and that there's been way too much enthusiasm for just about everything from the minerals to the oils to tech. Kind of confirms what I saw in the charts this weekend: a massive overextension of some groups to well beyond where they could be.

And there's been no mutual fund money coming in today, at least so far.

I am totally torn on today. You could argue that this selloff is the long overdue one, as we have been up for weeks and weeks. But you could also argue that stocks are simply getting in place for expiration, and we had to gravitate to the lower strikes.

That's what Intel (INTC - commentary - Trade Now) and Oracle (ORCL - commentary - Trade Now) feel like. So do the drugs, Pfizer (PFE - commentary - Trade Now) and Johnson & Johnson (JNJ - commentary - Trade Now), which are erring to the downside.

The aerospace complex is reacting to the disappointing news about Boeing (BA - commentary - Trade Now) not being ready, news that fooled me, as I though these guys had it together. United Technologies (UTX - commentary - Trade Now) and Honeywell (HON - commentary - Trade Now) say that all is well, but they are going lower, and in both cases they are overshooting strikes. Wal-Mart (WMT - commentary - Trade Now), like Boeing, has overshot, but then again, it has bad news, too, this time in the form of the Goldman downgrade.

If it is a strike-lowering day, look for IBM (IBM - commentary - Trade Now) to head lower for certain, as $105 would be the right level. Same with Caterpillar (CAT - commentary - Trade Now). By this same analysis, Amazon (AMZN - commentary - Trade Now) has further to fall, too.

But the two to watch are Apple and Research In Motion (RIMM - commentary - Trade Now), which have touched where they seemingly have to go. They are signs of bottoming in themselves. I trust them more than anything else on my screen right now.

At the time of publication, Cramer was long HON.

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