Dr. Kearney’s Option Clinic March Madness, Triple Witch and Volatility

Triple Witch Expiration week can be volatile, but this week’s reminded me of a "perfect storm". 

The nuclear story out of Japan had traders and investors edgy all week.  One nuclear comment mid-week moved markets sharply, until it was learned that the "breaking story" was from an interview 15 hours previous, and was taken out of context. The no fly zone in Libya, a European country downgrade and the FED intervention the morning of options expiration all added to market uncertainty. 

A "quiet" Friday expiration had markets finally moving higher on good news. Cisco announces it’s first ever dividend, the FED approved big banks raising their dividends (which was talked about all week on trading desks), and some good economic numbers contributed to the one day rally.

For the week the DJIA lost 440 points, the SPX was off 17 points and the VIX was up 1 1/2 points. SPX averaged over a million contracts per day last week, and CBOE’s volume Friday was ~5.9 million contracts.

Japanese markets are closed Monday due to a holiday. The Durable Goods report and a sentiment number on Friday look like the things to watch on our side of the pond. 

It could have been worse. I could have picked Louisville and St. Johns to win their first three NCAA tournament games (I had them winning two). I hope you had a nice St. Patrick’s Day.

Dr. Kearney’s Option Clinic is now Closed !