To The Moon

The first quadruple witching day of 2023 is coming on Friday (17/3/2023) trading. U.S. stocks set for wild swings as trillions in options contracts set to expire Friday.

What is Quadruple Witching?

Quadruple witching refers to a date where stock index futures, stock index options, stock options, and single stock futures expire simultaneously. The final trading day for stock options is generally the third Friday of every month.Previous, Days like these sometimes coincide with volatility in markets as traders scramble to cut their losses or exercise “in the money” contracts to claim their winnings.

Goldman Sachs estimates that 2.8 trillion quarterly options will expire this Friday, including $1.8 trillion index options. Indexes volatility is expected to increase. Therefore, investors should still pay close attention and pay more attention.

After experienced volatile in Bank stocks and technology stocks this week, quadruple witching day add some more tension on Friday. Please vote your attitude toward tonight's $S&P 500(.SPX)$ Performance.

Welcome to review some historical data:

According to the above data, the $S&P 500(.SPX)$ closed down more than 80% of performances on the witching days, but the decline was not as large as expected.

However, this does not mean that the quadruple witching day has no influence on the stock market. In fact, during the quadruple witching day, the trading volume usually explodes, and the market volatility will also increase.

A top derivatives analyst at Goldman sees the potential for stocks to see even wilder swings in the sessions to come as a rash of contracts that have helped to suppress volatility in the equity market expire.

The performances of some other assets at the Asian trading date:

• Treasury Yields：And major U.S. banks led by JP Morgan Chase and Bank of America Corp are looking to deposit nearly $30 billion in First Republic, the news drove a stock rally and assuaged market concerns about financial contagion. That has stabilized Treasury buying.
• $USD Index(USDindex.FOREX)$ : Dollar slips as banks rescue makes room for relief rally.
• $Gold - main 2304(GCmain)$ : Bank stocks tumbled as investors turned to safe-haven assets such as gold.
• $Light Crude Oil - main 2304(CLmain)$ : Crude oil hits 2023 lows, outlook dims.

Macro Focus:

Next week's Fed meeting on Mar 22 2023, markets expect "volatility levels to remain elevated" ahead of the meeting.

Futures traders are pricing in a high probability that the Fed will raise by 25 bps. According to the CME's FedWatch tool, traders still see a roughly 20% chance the Fed will choose to keep rates on hold.

Economic data:

• After briefly boosting consumer spending in January, U.S. consumers cut spending again in February.
• The monthly rate of CPI rose by 0.4% in February, a slowdown from 0.5% in January. The annual rate fell to 6.0% from 6.4%, down a third from a peak of more than 9% last June.
• U.S. jobless claims fell more than expected to a seasonally adjusted 192,000 in the week ended March 11.
• Housing starts bounced nearly 10% last month and building permits rose.
• However, the Philadelphia Fed manufacturing index plunged to -23.2.

Welcome to share your understanding on today's trades. 

$S&P 500(.SPX)$ $DJIA(.DJI)$ $NASDAQ(.IXIC)$ $Semiconductor Bull 3X Shares(SOXL)$ $SPDR S&P Regional Banking ETF(KRE)$ $iShares US Regional Banks ETF(IAT)$ $E-mini S&P 500 - main 2306(ESmain)$