September Quadruple Witching Week Dodgy, Week After Dreadful | Jeff Hirsch

Since the S&P index futures began trading on April 21, 1982, stock options, index options as well as index futures all expire at the same time four times each year in March, June, September [20 - Fri], and December. September’s quarterly option expiration week has been up 54.8% of the time for S&P 500 since 1982. DJIA and NASDAQ have slightly weaker track records with gains 52.4% of the time and 52.4% respectively.

However, the week has suffered several sizable losses. The worst loss followed the September 11 terrorist attacks in 2001. In the last twenty-one years, S&P 500 and NASDAQ are tied for best record during September’s quarterly option expiration week, up thirteen times, but NASDAQ has been down the last six straight. Friday had been firm with all three indices advancing every year 2004 to 2011, but S&P 500 has been down 11 of the last 12 and NASDAQ has been down 10 of the last 12 since.

S&P 500 Down 27 of 34 Week After September Quarterly Options Expiration, Average Loss 1.06%

The week after September options expiration week, has a dreadful history of declines most notably since 1990. The week after September quarterly options expiration week has been a nearly constant source of pain with only a few meaningful exceptions over the past 34 years. Substantial and across the board gains have occurred just four times: 1998, 2001, 2010 and 2016 while many more weeks were hit with sizable losses. In 2022 DJIA and S&P 500 declined over 4% while NASDAQ fell 5.07%.

Full stats are the sea-of-red in the tables here. Average losses since 1990 are even worse; DJIA –1.09%, S&P 500 –1.06%, NASDAQ –1.06%. End-of-Q3 portfolio restructuring is the most likely explanation for this trend as managers trim summer holdings and position for the fourth quarter.

Reference:
Jeffrey A. Hirsch (September 17, 2024) - September Quarterly Options Expiration Week Dodgy, Week After Dreadful.

See also:

Wayne Whaley (September 14, 2024) - September 19-26 Weakest Seasonal S&P Week of the Year.   

David Hickson (September 12, 2024) - Hurst Cycle Projection for the NASDAQ and S&P 500.

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

September 19-26 Weakest Seasonal S&P Week of the Year | Wayne Whaley

The weekly performance measure used for comparison is an average of the weeks of interest over the last 50 years, which,

1. Underweights outliers that can distort averages and overweights the observations congregating more toward

     the median and,
2. Weights the most recent years 2 to 1 vs those 50 years prior. 

 

 Wayne Whaley @ X — September 14, 2024.

 

See also:

Wayne Whaley (August 31, 2024) - S&P 500 Soared 7% in Summer, Shifts Weakness to October.  

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

Don't Panic in or out of a Market | Robert Miner

Beware of FOMO. Don't Panic in or out of a Market. Learn to identify probable market position, specific trade opportunities and trade management.

 

ES U24 - daily closes.

» A "daily" high is likely early next week, followed by a 4-5 day or so decline. «

 

ES U24 - weekly bars.

 » ES is likely to be mostly trendless for another week or two. When the two momentum cycles are 

aligned, a consistent trend will follow. The resolution is likely to eventually be to the upside. «

 Robert Miner @ X — September 14, 2024. 

 

» Don't Panic ! «

Robert Miner @ X — September 4, 2024.

 

See also:

Robert Miner (August 31, 2024) - S&P 500 Uptrend May Extend to 5,800 Into Equinox.  

Price Action Patterns & Entries at High and Low of the Day | Cameron Benson

Our focus is on price action trading at key levels: daily high and low, and the previous day's extremes. We examine how price reaches these levels — through Stair-Stepping or Ramping — and its subsequent behavior. The price action patterns include M's, W's, Double Tops/Bottoms, and Pin Hammers at daily highs and lows. 

 

 Stair-Stepping and M Patterns: These indicate potential reversals at daily highs or lows, 

with detailed entries and exits often managed through lower time frames.

Ramping is characterized by parabolic price movements and often leads to swift reversals. Observing tight candle patterns with minimal overlap helps identify strong trends and potential breakouts. We also look for specific patterns like Stair-Stepping and Three Pushes, with Peak Formations signaling possible reversals.

 

 Ramping Behavior: Recognized by tight, parabolic moves followed by rapid reversals. 

The ramp into extremes usually signals significant price shifts.

The following 5 minute charts of the NASDAQ are from last week (September  9-13, 2024). They show Entry and Exit Strategies, using Pin Hammers and Engulfments for Entries, and managing stops based on price action, with adjustments for larger, more volatile bars.

Monday, September  9 (Day 1 of 3 Day Cycle):

 

 Identified an M pattern at the high of the day with a pin hammer and engulfment, suggesting a strong short entry.

Tuesday, September  10 (Day 2):

 

Despite a promising setup, a large entry bar resulted in a stop-out. 

Emphasis on avoiding large entry bars and managing risk.

 

Wednesday, September 11 (Day 3/1): 

 

 Similar to previous days with M patterns and engulfments, also highlighting entry points and risk management.

Thursday (Day 2) and Friday (Day 3), September 12-13:

 

 Charts show patterns like descending triangles and W formations, 

with a focus on understanding price behavior relative to session timings.

 

Successful short-term trading relies on recognizing and acting upon the above presented price action patterns, managing entries and exits based on contextual behavior, and adapting strategies according to the specific market conditions within the 3 Day Cycle.

 

Reference:
Cameron Benson (September 14, 2024) - Price Action High And Low Of The Day (Day Trading Entries)(video) 
Cameron Benson (September 14, 2024) - Price Action High And Low Of The Day (Day Trading Entries)(pdf)
Cameron Benson (June 16, 2024) - The Complete 3 Day Cycle Short-Term Trading System.

Stacey Burke (December 5, 2023) - The Three Day Cycle & Parabolic Trade Setups.
Cameron Benson (August 20, 2023) - Three-Push Reversal Patterns.

 Richard D. Wyckoff (August 30, 2024) - Re-Accumulation & Re-Distribution Range Patterns.

Richard D. Wyckoff (December 21, 2022) - Accumulation & Distribution Schematics.  

Hurst Cycle Projection for the NASDAQ and S&P 500 | David Hickson

 

There is uncertainty regarding the 20-day cycle trough's exact timing. The average length for this cycle is 17 days. Positioning the trough on August 22 aligns better with the 40-day cycle, which should be forming around September 9.

 

In the NASDAQ, similar trends are observed. The crest of the red dashed line of the Hurst Cycle Composite is around Quadruple Witching Friday, September 20 ± a few trading days.

Reference:
David Hickson (September 9, 2024) - The 40-Day Trough - Hurst Cycles Market Update. (video)

 

See also:

Jeffrey A. Hirsch (September 5, 2024) - S&P 500 September 2024 Seasonality.

Wayne Whaley (August 31, 2024) - S&P 500 Soared 7% in Summer, Shifts Weakness to October.

Robert Miner (August 31, 2024) - S&P 500 Uptrend May Extend to 5,800 Into Equinox. 

Financial Oligarchies vs. State Power | Michael Hudson

My articles about the origins of credit, money, and interest share a common frame of reference. From the inception of economic practices and enterprise in the ancient Near East, through classical antiquity and medieval Europe to today, wealthy classes have sought to transform themselves into an oligarchy that controls government and religion to protect, legitimize, and increase their wealth, especially their rent-extraction privileges as creditors, monopolists, or landlords.

 Marcus Licinius Crassus (115 – 53 BC): 

general, statesman, the richest man in Rome, and a textbook oligarch.

 

We see the same struggle through the ages, with financial elites opposing any government power capable of restricting their self-serving rent-seeking and creditor power at society’s expense. We see it today in the pro-creditor economic policies of the International Monetary Fund, the World Bank, and the ‘libertarian’ ideology, all of which seek to centralize power to allocate resources and plan economies within the financial sector instead of democratic governments. Today’s neoliberal idea is to eliminate government authority (except where it is controlled by rentier sectors) and let banks in the privatized financial sector control money and credit, which is the most important public utility.
 

That should be the context in which one examines every epoch’s economic view of the world, above all its perspective concerning how ‘free’ a market should be and just whose freedom is being endorsed. This has been the great question throughout the history of civilization—from the Bronze Age Near East, when rulers regularly proclaimed Clean Slates debt cancellations to restore economic order and check incipient oligarchies, through the five centuries of civil war in the Roman Republic and Jesus’s fight against the emerging Jewish oligarchy, to today’s civilizational struggle between the NATO West, dominated by U.S.-oriented rentier oligarchies, and the global majority now centered on the BRICS.

 Rare Anomaly: Populist Pariah Oligarchs Proclaiming to Serve the Common Good —  September 2, 2024.

China’s government has financed its remarkable industrial takeoff without having to borrow from private creditors. There was little money to borrow from its domestic population, so the Bank of China printed its own money. Unlike typical financial practice, it did not demand personal wealth be pledged as collateral because stock and bond holdings or substantial real estate did not yet exist. The government did not need to turn to bondholders to increase its public spending—and in any case, there were no domestic bondholders to borrow from in the wake of its Revolution. China did what any sovereign national government can do—what Abraham Lincoln did in the Civil War. It simply printed the money.

 

Quoted from:
Michael Hudson (September 1, 2024) - Reshaping Christianity and the Modern State: A Journey from Usury to Fiscal Power.

 

See also:
Stephen Mitford Goodson (2017) - A History of Central Banking and the Enslavement of Mankind.

Failed U.S. Regime Change Attempt in Mexico

The adoption of a constitutional reform in Mexico ended in riots. Demonstrators seized the Mexican Senate building and tried to disperse lawmakers. But unsuccessfully, two thirds of the senators managed to vote in favor. The reform will affect the Supreme Court of Mexico - its members will now be directly elected. This has become a priority for Mexican President Andrés Manuel López Obrador. After all, the judges blocked many of his initiatives in every possible way. López Obrador's successor, Claudia Sheinbaum, won the recent elections, and his Morena party won two-thirds of the seats. Now they are going to change the judges.

 

 USAID demonstrators storm the upper house and enter the chamber.

 —  September 11, 2024.

At the moment, the courts are increasingly involved in politics, and all over the world - from the USA and Brazil to Poland and Israel. Therefore, the struggle for control over the judicial system is intensifying everywhere. In Mexico, López Obrador's reforms are causing acute dissatisfaction with Washington. The American ambassador even called them "the erosion of democracy." Well, through USAID and funds from the United States, the activities of opposition NGOs are sponsored, whose participants just stormed the Senate building on September 11. And, unlike the storming of the U.S. Capitol on January 6, 2021 this did not cause any criticism from Democrats in the United States. 

 

Mexico has already curtailed military cooperation with Washington and refuses GMO grain from the United States. During the López Obrador era, Mexico began to drift towards China. The pro-American candidates in the recent elections have flown by. So López Obrador has to rock the boat through the riots - and at the same time the U.S. writes Mexico off the "list of democracies." López Obrador in response refuses to help with the migration crisis, which is already destabilizing the United States itself.

 U.S. Coup d'État in Chile —  September 11, 1973.

 

Reference:

Aljazeera (September 11, 2024) - Mexico’s Senate passes judicial reform after protesters break into chamber.

The New York Times (August 27, 2024) - Mexico Pauses Relations With U.S. Embassy Amid Clash Over Judicial Overhaul.
Mexico Pivoting Away From Washington’s Grip —  August 18, 2024.

Andrés Manuel López Obrador (May 8, 2024) - The US is in Decline and Desperate Need to Modernize.

Russia Happy with Harris and Trump | Alexander Dugin

If Trump wins, he will act differently than he did during his first term in office. He won't have another chance to put his ideas into action. And he does have ideas. He wants to change everything in both US foreign and domestic policy. And now he's not gonna care about the Swamp. He will have to napalm it. In fact, he'll establish a national idea against globalism, and maybe even raise the dizzyingly Hegelian question of constitutional monarchy. And how else to make America great again than by proclaiming a monarchy! And you have Curtis Yarvin, the mastermind behind the post-liberal right-wing Vance, saying the same thing. And yes, Trump will likely lift sanctions on Russia and try to break our alliance with China.

»  We'll be supporting not Trump, but Kamala Harris. She will destroy America for sure. «

However, we'll be supporting not Trump, but Kamala Harris. And rightfully so. After all, she will destroy America for sure. It's certainly a safer option. But we're happy with either candidate. We can deal with either a great strong American monarchy based on traditional values (Trump will quickly eliminate all its furries and quadrobers and lgbt+ people, take away dope from drug addicts, and finally build the highest wall with Latin America), or stoned liberal degenerates on all fours, who abandon their old astronauts in orbit because of commercial expediency and encourage illegal migrants to rob stores and kill whites. These are very promising elections for Russia. So, we have no reason to interfere in them. What for?

Quoted from:
Alexander Dugin (September 9, 2024) - 2024 US Presidential Election: Russia Will Win Regardless of Outcome. 

Chinese Intellectual Shen Yi on the U.S. presidential Debate —  September 10, 2024.
 

See also:
Putin Aligns with Biden's Support for Kamala Harris as Next U.S. President —  September 5, 2024.

Pepe Escobar (July 15, 2024) - Wishing Comrade Trump a Speedy Recovery.

Despite Biden's Latest Insult, Putin Still Supports Biden's Re-election —  February 22, 2024.

Martin Armstrong (August 30, 2024) - The U.S. Is Now Ready for Violence, Civil War & Secession.

Toby Crabel’s Bull Hook Trading Strategy Tested | Ali Casey

As an algo trader, I value patterns for their ease of programming and testing, which allows for the development of robust trading strategies. Today, we'll explore bull and bear hooks, patterns that can vary in details but generally serve to catch traders on the wrong side. Toby Crabel, Joe Ross, and Thomas Bulkowski, among others, have variations of these patterns.

Toby Crabel's original definition of the Bull Hook pattern:

» A Bull Hook occurs on Day 2. A Bull Hook is defined as a day with a higher open than the 

previous day's high followed by a lower close with a narrowing daily range. The next day (Day 1), 

a trade is taken on the initial move off the open, preferably to the upside. «

 

Toby Crabel's original definition of the Bear Hook pattern:

  » Bear Hook is a day in which the open is below the previous day's low and the close 

is above the previous day's close with a narrow range relative to the previous day. As implied by 

the name there is a tendency for the price action following a Bear Hook to move to the downside. «

The Bull Hook pattern has two main forms:

Bull Hook 1: In a downtrend, the pattern is identified when today's bar is an up bar with a smaller range than the previous day and is an inside day (high lower, low higher than the previous bar). We buy with a stop order above the high of this bar.
Bull Hook 2: Here, today's bar is a down bar with a smaller range than the previous day, opening above the previous high and closing below the previous close. This pattern involves just two bars.

For testing, I used TradeStation with S&P 500 e-mini futures data. The backtest for Bull Hook 1 was disappointing, showing a loss with only 15 trades, which seemed unusual given its pullback nature. A deeper analysis suggested that the specific conditions, particularly the inside day and green bar requirements, were limiting trades. By removing some conditions, like the inside day and green bar, and focusing on a simpler pullback strategy, the results improved significantly with about 200 trades and positive performance metrics. For Bull Hook 2, the test also yielded fewer trades than expected, which might be attributed to its breakout nature, not performing well on the S&P 500. Simplifying the conditions here also improved the results somewhat, though it remained less effective. The Bear Hook pattern, when flipped for long trades, performed better but still had a low trade count. Removing some conditions and simplifying it increased the trade count and improved performance. While both Bull Hook patterns had potential, their effectiveness was highly dependent on specific conditions and the number of trades generated. Simplifying the patterns often led to better results.

Reference:
Ali Casey (July 28, 2024) - The Secrets of Toby Crabel’s Bull Hook Trading Strategy Exposed. (video)
 Toby Crabel (1990) - Day Trading With Short Term Price Patterns And Opening Range Breakout.
MyPivots.com (2024) - Scanner for Toby Crabel Price Patterns in the E-mini S&P 500 Futures. 

 

See also:

Thomas Bulkowski (2013) - Hook Reversal, Uptrend.

 Thomas Bulkowski (2013) - Hook Reversal, Downtrend.

Joe Ross (1991) - Trading the Ross Hook.

Slava Loza (2021) - How to Trade the 1-2-3 Reversal and the Ross Hook Patterns.

Thomas Bulkowski on Hook Reversals in an Uptrend and in a Downtrend.

Kitchin Cycle Suggests DJIA Decline Until End of 2025 | Sergey Tarassov

 » DJIA correction begun, and the 41 Month Kitchin Cycle suggests a decline until the end of 2025. «  
 —  Sergey Tarassov, August 5, 2024.

 

» Multiyear High in the DJIA between June and October 2024, i.e. sometime
between the crests of the 40 Month Cycle and the 42 Month Cycle.  «    
 —  Sergey Tarassov, June 25, 2024.

Reference:
Sergey Tarassov (August 5, 2024) - Tune Up 41 Month Kitchin Cycle for DJIA. (video)
Sergey Tarassov (June 25, 2024) - Review of Forecasts for DJIA, Gold, Bitcoin, IOC and Mexican Peso. (video)

 2024 in W.D. Gann's Financial Time Table: » Major Panic - CRASH! «

 

Panic Cycles Week July 15 - 19 & Week September 9 - 13.

—  Martin Armstrong, June 14, 2024.

 

A Sophisticated Look at Pivot Points | John Seckinger

The following is based on an SFO article published in December 2004 by John Seckinger, titled, "Take a Two-Dimensional Approach: A Sophisticated Look at Pivot Points." He offers these tips:

■    Don't look at the range of S2 to R2 as support and resistance levels. Rather, consider them oversold (S) and 

       overbought (R) areas.
■    S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they 

       lend more significance to the area.
■    If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily

       S1 and daily R1 the next day.
■    In a quiet market when traders are waiting for an important earnings announcement or economic report, 

       look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
■    A move outside of daily R1 or S1 usually does not mean a breakout.
■    The odds suggest that the entire week's price action will remain between weekly R2 and S2.
■    Avoid going long when the market moves above weekly R2 (it's overbought) 

       and avoid going short when price moves below weekly S2 (oversold).
■    Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
■    Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1,  respectively.

 

   —  John Seckinger

Daily, Weekly, and Monthly Floor Trader Pivot Points for the Week of September 9, 2024:

 

 » There often will be confluences when comparing the weekly and daily S2 to R2 levels 

that increase this area’s significance. «   —  John Seckinger

Here are the formulas to calculate daily, weekly, monthly, etc. Floor Trader Pivot Points:

Quoted from:
Thomas Bulkowski (September 7, 2024) - Swing Traders: Pivot Points.

 

DJIA Index (daily bars) — Weekly Pivot Levels (September 3 - 6) & Daily Pivot Levels (Friday, September 6).

See also:
John Seckinger (2004) - Take a Two-Dimensional Approach: A Sophisticated Look at Pivot Points.

Franklin O. Ochoa Jr. (2010) - Secrets of a Pivot Boss - Revealing Proven Methods for Profiting in the Market.

MyPivots.com (2024) - Daily and Weekly Trading Metrics for the Dow Jones Industrial Average Cash Index.