The third Friday of March, June, September, and December, is Quad-Witch day. This is when stock index options, stock index futures, individual stock options, and single-stock options, all expire on the same day. On Quad-Witch day, we tend to see a spike in volatility off the back of a roughly 40% increase in volume (on average).
We will see roughly 45% of all S&P options expire in December (18th and 31st), with the bulk expiring tomorrow. Based on the current state of the Put/Call ratio, most of these options are calls. Based on the fact that we're at all-time high's, economic data continues to deteriorate (the best and most timely indicator being jobless claims), Stimulus deal coming any second, vaccines priced in, etc.. I would be on the lookout for major fireworks at power hour tomorrow.
As for today, I suspect we may see the end of the Bearish Harmonic pattern playing out on both the short-term timeframes, and also on a larger scale, shown clearly on the daily and weekly timeframes as well. I'm calling 373 as the top, and then I think it's going to get ugly from there. Let's see what happens next.
I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.