Triple Witching Could Trigger Sell-Off

The S&P/ASX 200 has dropped nearly 8% in the last three weeks and is resting on major support.

The largest-ever triple witching hour is about to take place in the US, and in the past, the March triple witching hour has often led to a sell-off in the following week.

The S&P 500 remains stuck in its six-month range, but it’s just 200 points above its low.

72% of S&P 500 stocks are below their 50-day moving averages, suggesting underlying weakness.

It feels like it won’t take much to spark the conflagration.

The Iran war continues to escalate, with major gas facilities the target of attacks.

In this environment, you are brave to stick your neck out and say what is coming next, because the war could end, changing the situation.

So all I will say is that it’s not yet time to be gung-ho about buying the dip. There could be more volatility ahead.

The oil price has had a double top at US$120, retreating to US$105 by the end of the week. As we show you in the video below, the oil price rarely spends much time above US$110.

Gold has been hammered, seeing its worst week in years. Gold stocks are in freefall and could present a buying opportunity if the selling continues.

Bond markets around the world continue to see stiff selling pressure. UK 10-year bond yields have jumped 63 bps to 4.86% in three weeks.

The higher the correlation between stocks and bonds, the greater the chance that risk-parity funds will be forced to deleverage.

That can ignite further selling by other strategies, as mentioned last week.

Dr Copper is also under pressure, with attacks on gas infrastructure possibly igniting fears that economic growth will be threatened.

We discuss all of the above in today’s Closing Bell.

Just so you don’t leave with a sad look on your face, we finish up showing you a stock we have been discussing recently that continues to rally despite market weakness.