Maksims Covered Call Options Forum

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Schaeffer's Research outlook.

What the Trader Is Expecting in the Coming Week: Will Triple Witching be a Nightmare Before Christmas?
By Todd Salamone, Senior Vice President of Research

As Wall Street faces another potentially volatile week of trading, investors could be presented with a multitude of short-term trading opportunities. Economic reports including industrial production, building permits/existing home sales, and the consumer price index (CPI) are just a few of the potentially market-moving events on tap for the week ahead.

Other catalysts include a meeting of the Organization of Petroleum Exporting Countries (OPEC), a decision on U.S. monetary policy from the Federal Open Market Committee (FOMC), as well as quarterly earnings reports from Goldman Sachs (GS) and J.P. Morgan Chase (JPM). And, let's not forget that Washington holds the keys to the future of the domestic auto market. Any developments on this front could provide additional twists and turns for the market this week.

The ominously named triple-witching expiration is also on tap this week. Despite its foreboding title, triple witching has actually provided an historical upward bias for the market. From January 2006 through September 2008, there has been a tendency for the market to advance, as the unwinding of bearish positions in the options and futures markets creates a tailwind for the broad market. In fact, 8 of the past 11 triple-witching expiration weeks have been positive.

Full Link
http://www.schaeffersresearch.com/commentary/observations.aspx?ID=89796