Day Before September Quadruple Witch

Two different schools of thought when it comes to the rest of the week’s market action:

Bill King at M. Ramsey King Securities notes that:

"Today – Usually on the day before expiration there is a soft morning and the usual late Thursday rally attempt. This rally attempt can be amplified ahead of future’s expiration because equity futures holders often replace their expiring futures contracts via purchasing stock on Friday’s open. BUT this ploy could be greatly mitigated by the CPI report and the plethora of impact economic data that is due on Friday before the open…

Expected economic data: Import Prices +0.3%; Advance Retail Sales -0.2%, ex-autos +0.3%; Initial Jobless Claims 315k, Continuing Claims 2.495m; Business Inventories +0.5%.

Last month we commented, and produced a chart, that showed for most of 2006 the months have had a similar profile : Strong at the end and start of the month and ahead of expiration; and down the other parts of the month. January, due to the strong start of the year seasonal, and May, because of the May 10 FOMC, are the only aberrant months this year. Ergo stocks should be making a short-term top (at the least) in the next few days."

Then there’s The Stock Trader’s Almanac view on the actual (quadruple) triple witch:

Septmber Triple Witch has seen the Dow Down 15 of the last 25, and the 10th trading day of September Nasdaq has been down 18 of the last 22 (10th day = 9/15 this year)

Me? I have no opinion . .  .

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  1. lurker commented on Sep 14

    Both of these are what I call historical data dumps. They have no bearing on the future and thus no profitable use, but they sound like knowledge that has come from looking at facts. They are noise. No more and no less.

  2. alpha dog commented on Sep 14

    Sorry to go off topic, but did Barry ever explain why he left Maxim? If so, can someone point me to the post? I tried to search for it, but couldn’t find anything.

  3. muckdog commented on Sep 14

    When we’ve had a strong weekly trend, fridays tend to be profit-taking days. This options-ex week has been a good week for the bulls. I think the no brainer prediction for tomorrow is profit taking. We then have two weeks before the next bullish monthly trends, the end of quarter shenanigans and end of month payroll hitting 401k accounts.

  4. Sammy20 commented on Sep 14

    Can anyone here give insight as to the similarities between today and the mid 70’s?

    It looks like between 74-76 the price of gold after surging to $200 went all the way back to $100 before rebounding on its way to $800+. Also during this time the market fell fairly severly. I guess what I am getting at is are there any similarities between this time period and that one. I assume the “deflation” argument came up then as it is starting to creep up somewhat now.

    Maybe the next round of re-inflation by the fed is the next leg of a commodity super cycle?

  5. Mark commented on Sep 14

    alpha-

    It was all those centerfold spreads they were having him do. If you had seen some of them you would know why he had to go. Whoops! Different Maxim. Never mind.

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