Market Watchers: Beware The Ides Of March

It is Lupercalia, an ancient Roman religious holiday. Caesar, the Roman dictator, makes his appearance before the “press” (crowd) in the streets. From out of the crowd, a soothsayer shouts out.

Who is it in the press that calls on me?
I hear a tongue shriller than all the music
Cry “Caesar!” Speak, Caesar is turn’d to hear.

Beware the ides of March.

What man is that?

A soothsayer bids you beware the ides of March.

Julius Caesar Act 1, scene 2, 15–19

Lets call modern day Caeser the NASDAQ (QQQQ) as technology stocks are leading the stock market relentlessly. The ides of March is the 15th.

Currently the market is suffering some days of very heavy selling. Just as it did in May, and what followed in may is what is now known as the ‘flash crash’. For sure, it can happen again if the investment banks (you know the ones that return 98% winning days) turn off their much loved ‘go long only’ algorithms as they fear the selling is just too heavy.

A leading component of the NASDAQ is the Semiconductor index (SOX) and the following chart shows that the 42 week cycle has an 85% accuracy. With oil skyrocketing and fund managers showing large profits on their books a period mild profit taking could very easily turn into a roll-a-coaster ride down. A quick scan of our blog notes that we are at a critical pivot point in the market and currently that is still playing out.

QQQQ puts premiums must be doing well.


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