What Does Today’s Quadwitching Mean For The Market?

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00:00 Going to you, Joel, let's talk a little bit about, of course, QuadWitch Day, SPYX, Dividend.

00:05 What do you think about the QuadWitch coming into play exactly with the environment we

00:09 have?

00:10 Oh, I mean, this is just a really unusual one with the Fed speak.

00:16 It's just, it's turning points in the market, right?

00:19 And you've seen it off a lot of different expirations.

00:23 Will this just be like a, you know, like a blow off top and a reversal or just a really

00:30 strong continuation of the trend?

00:33 And right now, I mean, there's nothing in there, nothing, seeing nothing technically

00:40 that says that this is, you know, this market's slowing down.

00:43 You're coming into seasonality.

00:44 I don't know.

00:45 There could be some extra event or, you know, some kind of thing that's beyond our control.

00:52 But, you know, there could be a big, probably big buying balances here.

00:56 But it's an important day for the market.

00:58 We've already rolled over to the March contract.

01:02 And December goes off the board today.

01:05 So Dennis, what do you say?

01:06 Well, balances are going to be there, but they're going to flip a lot.

01:10 Yeah, you can't.

01:11 So one day we can look at pre-market imbalances and get a feel for where stocks are going

01:14 to open.

01:15 You cannot do that on a third Friday because they flip the line, they flip the shirt, they

01:18 go all over the place.

01:19 That is meaningless on this day.

01:21 But you do see some weird open.

01:23 So the way I've always approached the open is the old Don Bright strategy.

01:26 May he rest in peace.

01:27 But Don Bright's taught us so much of bright trading.

01:30 And he's got the whole envelope system where he goes and, you know, he's offering stocks

01:35 to short if they're opening too far above fair value.

01:38 And if they open too far below fair value, he's buying.

01:41 Those strategies work sometimes, but they work really well on these types of days usually.

01:46 But again, we're in so much rotation here right now.

01:49 That strategy works better when everything's moving together.

01:51 You got to have a stock opening down two and then it goes down four.

01:54 So it's a little bit scary to do that strategy right now.

01:57 You've almost got to have a feel for, well, these stocks are probably the ones that are

02:01 going to like I wouldn't want to buy Microsoft below fair value yesterday because you get

02:05 crushed.

02:06 So you got to kind of have that feel with the two and saying, well, they're probably

02:08 going to come out and make a cap tech.

02:10 Maybe if Microsoft opens too high, I get short.

02:12 So you know, you got to get your ducks in a row, combine multiple strategies to come

02:16 up with a trading thesis almost right now when the rotation is this violent.

02:23 Just to illustrate here a little bit, where am I?

02:26 I should put an arrow in here to make it a little bit easier.

02:31 But you can see with the arrow, where's my arrow up?

02:35 Right here.

02:37 This was your March, right?

02:39 So the expiration right at the end of March kind of hung out at the, you know, we closed

02:44 near the highs.

02:45 This is going back to the March expiration continuation, right?

02:52 April, May, June, June, you had you had some follow through, but you did have a little

02:57 bit of a reversal in that.

02:59 And then September had just about marked the bottom right at the expiration.

03:04 We did go down a little bit more in October, but you could see, you know, the major turning

03:09 points in the market and this one up near all time highs.

03:14 So market has a lot of work to do.

03:15 But like what you said, going back to the Fed, I mean, it's just something, you know,

03:20 we, you know, we definitely weren't looking for that to come this early.

03:24 We thought it'd be dated.

03:25 Jeremy Siegel, everyone, you know, he's been calling the market pretty good.

03:31 He took the market by surprise.

03:33 And this is the adjustment to the shocking Fed speak, the shocking stuff that's coming

03:40 out of Fed.

03:41 And to Mitch's point, too, they were always data dependent.

03:45 Now they're all of a sudden in the prediction business, because there is no reason if you're

03:49 just looking at the data to be talking about lowering rates.

03:52 There's no reason if you're just looking at the data.

03:54 We haven't really slowed that much, you know, on from the data.

03:57 People aren't losing their jobs.

03:59 People you know, so they're lying when they say they're data dependent.

04:02 We always knew they weren't, but they're full on in the prediction business here now.

04:06 And that's what the market is adjusting for.

04:08 They're adjusting for an accommodative Fed.

04:11 And that is a scary thing to fight.

04:13 I tried to fight the Fed, you know, in 2013, 2014, we start going up.

04:17 You cannot fight the Fed.

04:19 Quantitative easing drove this market up 200% over the course of 10 years.

04:23 So if we're going to go back into an accommodative Fed, where they're just going to lower rates

04:27 every time we get a little hiccup, that's a scary thing to fight if you're a bear.

04:32 So I think you've got to put your bear thesis on hold.

04:35 I think everything changed two days ago.

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