Stocks Freak As Draghi Is No Bernanke

The market collapsed lower today as the new ECB chief Mario Draghi told markets he would not save the day. Expectations had been high for the ECB to come in and buy bonds from Italy and other stressed nations. It was clear in the short term, the ECB will not do this. The markets fell on this news with the Dow Jones Industrial Average dropping over 100 points on the day. The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) is trading at $120.84, -1.18 (-0.97%) .

In reality, the fact that Draghi said he would not buy EU debt should be no surprise. Think about it this way. If these nations in the EU are going to be responsible going forward, he cannot go and bail everyone out. That would be a U.S. Federal Reserve move. Instead, they must sweat a little and get their own house in order. The PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) is trading at $56.71, -0.37 (-0.65%).

The shock to the market is more so a fear that the new ECB head is hawkish and hardcore like the old ECB chief Jean-Claude Trichet. When Mario Draghi took over the post, many thought he was going to be a Ben Bernanke clone. This would mean he would bail out everyone just like the Federal Reserve did in 2008. This is obviously not the case, at least in the short run. As of now the stock market is adjusting to this new realization. The Dollar is jumping on this new found fear. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.19, +0.12 (+0.54%).

Gold and silver are both dropping sharply as the Dollar surges as well. The SPDR Gold Trust (ETF) (NYSE:GLD) is trading at $166.45, -2.89 (-1.71%). The iShares Silver Trust (ETF) (NYSE:SLV) is trading at $30.78, -0.82 (-2.59%).

About Gareth Soloway 168 Articles


Gareth Soloway has been an avid swing and day trader since his days at Binghamton University where he studied Economics. After college, Gareth quickly excelled as a financial advisor, helping clients get their financial houses in order. While helping others gain financial independence, he continued to study the day trading and swing trading world, developing a unique market philosophy and proprietary methods. Following his work in the financial sector, Gareth went on to trade alongside professional traders. Unable to tolerate the hype of Wall Street any longer and having an amazing ability to profit using his developed techniques, Gareth Soloway decided to partner with his friend and colleague, Nicholas Santiago to form Chief Market Strategist Gareth Soloway serves as the president and CFO of InTheMoneyStocks.Com.

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