NEW YORK ( ETF Digest) -- Beating much lower expectations can lead to a short squeeze and this was evident the past few days with some financials and Friday with Microsoft (MSFT) which beat earnings estimates by 3 cents. Remember, MSFT is one of the largest hedge fund holdings so pumping it higher seems easily job one. MSFT was up nearly 5% after the report which may strike some as an outsized gain. But the spin was the company reported good gains from the corporate sector meaning CFOs are loosening their purse strings. How long can you run XP anyway? The boys in the options pits must be chasing down options in MSFT and those silly bets made on Apple (AAPL) calls.The other big news on the day was that the IMF (mostly controlled by U.S. taxpayers) will pony-up another $400 billion in freshly minted dollars to rescue the euro zone once again. Even the Bank of Japan admitted this gesture (thank you America!) will only buy some time if austerity and reforms aren't implemented. And, right on cue, we have French elections on deck this weekend with polls indicating Sarkozy is toast. This makes his deals with Merkel & Co toast as well. So with the socialists back in control of Europe's second largest economy don't expect much in the way of austerity and reform. That's not on any socialist's agenda. Also the IMF has secured some "pledges" from BRIC countries for some contributions. Brazil wants a larger role without necessarily a larger commitment. Perhaps Argentina's Fernandez de Kirchner will pledge the minority balance of Spain's YPF she hasn't seized yet. Anyway, the bottom line for bulls is that the eurozone is fixed again if only for the trading day and week. The dollar (UUP) fell sharply (more IMF dollars make them cheaper?) gold (GLD) did little but other commodities (DBC, USO & JJC) with the weakening dollar were higher. All this brings us to options expiration which is day most investors should just take off. Most of what takes place reminds me of packs of wolves chasing down strike prices to exercise them to the disadvantage of the poor victims. Funny how this isn't the feature of those trashing leveraged ETFs wishing to rename them. What could we rename the options game I wonder? I was an options principal and I always thought of them as death traps. If volume is any measure, bears are clearly in control and markets are still under distribution judging from heavier sell day volume and vice versa. This is quite clear also when viewing the McClellan Summation Index posted at the end of this column. On the other hand volume on options expiration days is usually higher just given the mechanics of everything taking place. Volume Friday wasn't very high for an options expiration and breadth per the WSJ was mildly positive. You can follow our pithy comments on twitter and become a fan of ETF Digest on facebook. SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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