Quadruple Witching Brings Choppy Action To The Markets
Quadruple witching hits the markets on the third Friday of March, June, September, and December. If you are wondering what quadruple witching is, the answer is simple ― it’s the simultaneous expiration of stock options, futures options, index options, and outright futures contracts. Historically, these sessions can be choppy; today has proven past tendencies true.
Going into the final hours of the trading week, the DJIA DOW (-50), S&P 500 SPX (-15), and NASDAQ (+16) are all trading in whipsaw fashions. During the U.S. overnight, NASDAQ 100 futures went limit up; now, the June contract is trading in the red. For the time being, traders and investors appear to be limiting exposure ahead of the weekend COVID-19 news cycle.
During the pre-market hours, several real estate metrics were released to the public. The numbers came in strong:
Event Actual Projected Previous
Existing Home Sales (MoM, Feb.) 5.77M 5.50M 5.46M
Existing Home Sales Change (MoM, Feb.) 6.5% 0.7% -1.3%
While these figures are robust, not many analysts expect them to last. Projections for March will be vastly reduced amid coronavirus-driven market fallout.
U.S. Markets Choppy, Gold Near $1500.0
It has been a chaotic day on the financial markets, featuring heavy volatility. April gold futures have also been active, posting a 619 tick intrasession range.
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As we roll toward next week’s trade, there are two levels in this market worth keeping an eye on:
- Resistance(1): 38% Retracement, 1547.7
- Support(1): 2020 Low, 1450.9
Bottom Line: In the event we see an early-week rally in the bullion markets, a short from the daily 38% Fibonacci retracement may come into play. As long as 1450.9 holds as the swing low, I will have sell orders in the queue from 1544.4. With an initial stop loss at 1558.4, this trade produces 140 ticks on a standard 1:1 risk vs reward management plan.
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