Quadruple Witching Day Tomorrow...

Stocks are slightly positive today as oil staged a huge retreat as voices against high oil prices arise from all over the world. In fact, China's petroleum and diesel hike tomorrow would be expected to decrease worldwide oil demand dramatically, resulting in the big retreat we see today. Energy stocks were also hit today, otherwise we would have seen a bigger gain in the Dow. The fundamentals for high oil is quickly eroding all over the world since the day I posted my long anti-high-oil post. So, is this the start of a significant decline in oil price? Probably back down to $100? There are still no indications yet as crude oil prices merely traded sideways amidst all these noises. In fact, technicals still support higher oil prices as the recent price action of crude oil merely formed a bullish continuation pattern and not a reversal pattern. Well, some of my good positions have been taken out unnecessarily in the recent turbulence as well, making it extremely tricky to formulate good stop loss policies. Read more about Quadruple Witching.

Tomorrow is Quadruple Witching day and is a day where we can all expect even more turbulence. Quadruple witching is the third Friday of March, June, September and December every year where index futures, index options, stock futures and stock options all expire on the same day. Such expiration would cause stocks and indices to be transacted at all kinds of high and low prices as options and futures of different strike prices are being exercised. For conservative traders like myself, we prefer to go on a long weekend instead. :)