Triple Witching Day

Yesterday's market was pretty much flat after Wednesday's sell off. With triple witching day today we have to consider the probability that prices are being “parked” into their maximum pain values where option sellers maximize their profits. The market has a very bearish feel to it here, but this “feeling” is at least partially skewed by today's contracts expiration. The QQQQ is trading in a bear flag on its daily charts so it may drop lower today. Trend support is just below $39 and maximum pain is $39. We have to wonder that this trend might be in jeopardy next week. We didn’t trust the throwback on gold late August. It looked like a breakout failure like so many stocks and sectors over the past year so we missed the initial strong leg up in this newly developing bull trend. Gold miners are extended at this point but a pullback here should provide for a nice buying opportunity. If it starts to pull back here, we would like to see the XAU retrace to around 101-102 where we believe it will have support.