Bearish Post Options Expiration Strikes Again

May 22, 2006 · Print This Article

Historically, the day following options expiration is seasonally bearish. Today was no different as the market, once again, moved decisively lower. As we move ever closer to Memorial Day the market should start to move higher. Historically, the day before and the week following Memorial Day are quite bullish (with the exception of the day following the holiday). As most of the major indices move back into “very oversold” territory the bullish seasonality ahead could increase the probablity of a successful trade. The 200-day moving average seems to be an area of strong support. As I have mentioned over the past few days keep a close eye on that level.

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RSI Wilder (5) for May 22, 2006