‘Triple Witching’ (when stock options, stock index options and stock index futures expire) is often a turning point for stocks.
This was the case again this year. The March 21 Profit Radar Report pointed out that: “The S&P 500 closed lower on Triple Witching day 15 out of 21 years (71%). The week after Triple Witching ended with a loss 14 out of 21 years (66%).”
This statistic is based on the performance of the S&P 500 tracking ETF (SPY) since its inception in 1993.
Looking at seasonality, based on the S&P 500 (^GSPC) since 1950, paints the same picture.
The chart below shows S&P 500 seasonality based on:
- Every year since 1950
- Every midterm presidential election year since 1950
- Every midterm year since 1950 with a democratic president
All three seasonalities show pronounced weakness in late March.
What’s in store for April?
A full 2014 seasonality calendar is available to subscribers of the Profit Radar Report, but here's a look at an index that sports a real unique telling pattern.
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.
Follow Simon on Twitter @ iSPYETF
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