Historical Fact: March Triple Witching Sends S&P 500 Lower
Once every quarter stock index futures, stock index options, and stock options all expire on the same day.
This is called ‘Triple Witching,’ which is today.
March Triple Witching brings a rather bearish seasonal current.
Since the SPDR S&P 500 ETF (SPY) began trading in 1993, the S&P 500 closed lower on Triple Witching day 15 out of 21 years (71%).
The week after Triple Witching Friday ended with a weekly S&P 500 loss 14 out of 21 years (66%).
The chart above shows the performance of the S&P 500 (^GSPC) following Triple Witching for the last 12 years.
Post-expiration day weakness is also reflected in the S&P 500 seasonality chart going all the way back to 1950.
The seasonality chart shows:
Overall S&P 500 seasonality (based on every year since 1950)
Midterm S&P 500 seasonality (based on every midterm year since 1950)
Midterm S&P 500 seasonality with democratic president
Based on the Triple Witching and long-term seasonal patterns, the S&P 500 is likely to run into some trouble in late March (full 2014 seasonal chart is available to subscribers of the Profit Radar Report)
From a technical analysis point of view, there are specific levels that will unlock higher or lower targets.
Detailed trigger levels were pinned down in this morning's Profit Radar Report, but general trigger levels (and a couple of interesting tidbits of information) can be found here for free.
Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.
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