There are only four triple witching Fridays in a year. Last Friday was one of the them and the market didn’t fail to prove triple witching Friday’s abnormal trading reputation. On a triple witching Friday, there is the simultaneous expiration (or rollover) of various futures and options contracts. Many U.S. stock index futures, stock index options, and stock options expire on these days.
The bounce from the recent selloff has been impressive. S&P 500 closed at a fresh all time high last Friday. However, under the hood, there are plenty of wrecked stocks lying around, totally beaten, no signs of life to be seen. This divergence is not bullish for the bounce, yet the divergence can last longer than anyone’s patience and wallet.
The market tanked on black Friday due to the emergence of Omicron variant out of South Africa. The market did a very anemic technical bounce on Monday 11/29/2021. Then out of left field, the Fed Chair Powell spoke about accelerated tapering pace due to the higher than expected inflation.
