This week has been the champion’s owl of economic events. Our focal point has revolved around understanding these events, how they impact the market, and how to thrive in this market.
The essence of “quad-witching” – expiration of equity and index options along with futures – is to keep the market in place. When the market pops (or drops) quad-witching brings the market back to the mean.
A big level we’re focusing on during quad-witching is point of control (POC) because of its connection to liquidity. POC is the biggest level of liquidity, and we can expect price to move back and forth to these major liquidity zones during quad-witching. This is why we’ve seen the S&P 500 (ES) continue to retest its POC at $4,685.
After quad-witching ends tomorrow, we can turn our focus to the 2-day squeeze starting to form on the ES. We plan to use this squeeze as a compass for whether the Santa Rally will occur and send the market higher or squeeze to the downside.
Stay Focused!