The WIG20 Index also took a heavy hit today, closing below 2300:
After 2-months of confusion, it seems we finally have a direction (or bear trap). Therefore, the best position is still cash. We can't do much about the market, but it's good time to take a look at larger period and maybe try to find potential price action levels:
We just crossed the 37300 level (Jul low), the next important one is 35250 (2006 low) and 34000 (Fibo 61.8%). Below are levels of 31250 and 25500, but I don't believe (as if the market care what I think..) we are going there anytime soon, thus we leave them as for now. One sure and important thing from today's session is that we made a lower low and this is not a sign of bull market at all.
Session is US closed quite high with big volume, nevertheless they made lower low as well - the tomorrow's session can be interesting though. Make sure you watch today's analysis from Alphatrends blog - Brian Shannon seems to be confused as well.
The triple-witching hour is the last hour of the third Friday of each month that ends a year quarter (March, June, September and December). It marks the simultaneous expiration of stock options, index options and index futures. It is characterized by great volatility and index swings, where future traders are trying to set a more suitable close for them.
The next triple-witching hour will occur at Friday session. A chart from 21st Dec 2007 (thanks to gielda.onet.pl) shows what to expect:
Sources:
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:symmetrical_triangle]
[http://www.dacharts.com/articles/Buffy_on_price_action.php]
[http://gielda.onet.pl/notowania.html]
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