Market Update-Quad Witching

There's clear intention this morning to try to move the market higher, there isn't so much clear intention in the way of accumulating and then moving the market higher as in a cycle, this seems to be tied very clearly to Quad Witching.

If I'm playing options and I look at this chart, what kind of strategy do you think I'm going to chose? Based on PRICE ALONE, where are the highest probabilities and you can't look at this in the way we generally play options, straight buying puts or calls, these are slightly more sophisticated, but just slightly...

 Above you have over 5 trading weeks in a range, if you are dealing in options, what is the highest probability outcome looking at price, forget the concept of a head fake move above a clear defined level of resistance? I'm playing the range in any number of different ways, but we aren't looking at this from "our" perspective, we are looking at it from a "Follow the moving average, price is king, Marty Zweig is my idol" perspective. In that case, you're going to play the range and almost all options can play this , even the single stock options. Look at the volume today, does it really seem like a risk on move considering Q3 GDP just blew away consensus and makes tapering at the next meeting all the more likely? 

No, this is Quad-Witching.

 The Q's have the same range, it's 4 trading weeks old

The R2K has the furthest to go, but it's also probably one of the most profitable max-pain pins to shoot for because it would seem to be the safest from an options trader's point of view, "Ah, that former high isn't going to be taken out, look how bad the IWM has been lagging the market!"

The Dow is a perfect example of making those options worthless, with that move, they are gone.

This is most likely why, in my market update notes I have "DIA has the weakest current 3C trade and IWM has the strongest", it makes perfect sense, the DIA already crushed those positions, they don't need to support it, they can in fact start selling short in to it as long as they maintain price above the resistance level long enough for those options to close, usually by 2 p,m,

The IWM would look the strongest as it has the most work to do.

This same action is in XLK,  XLF especially because it's so close and several others that have that same range bound look and it's not just a week, we are talking about 5 trading weeks.

This may very well be a gift today or Monday, it depends on if they keep acting or start acting like the DIA.

The VXX has purposefully been knocked down, but there's a strong bid under it, I'll likely add to it soon, just look at it vs the market and HYG has been activated as well today, why do you think that is, ESPECIALLY when we get such strong Q3 final data, that's "GOOD NEWS IS BAD NEWS", but it doesn't matter because today is Quad Witching, 4 groups of options types all expiring on the same day.

Regardless of knocking VXX down at neutral on the day, they can't get enough traction to activate the SPY arb as of yet.

So the key is still VXX / UVXY, however the opportunities are likely going to be everywhere.

More in a moment.