Friday's Market Minute: Quad Witching, Volatility, And The Fed

After all the speculation, the Fed’s second interest rate hike of 2019 has come and gone. The 25bps cut, expected by much of the market, resulted in a quick V-shaped sell-off and rebound. But traders hoping for lower rates to propel markets into new highs have so far been disappointed. Although S&P 500 futures are tenaciously holding above the 3,000 price level, the contract has yet to take out the highs at 3,025.75 from last week – let alone the all-time high of 3,029.50. Technicians also note that the contract remains in a longer-term Rising Wedge pattern, typically regarded as bearish.

Meanwhile, the crude oil story this week sounded almost like science fiction as drone attacks on Saudi Arabian oil facilities took 5% of the world’s production offline. Prices have significantly retreated since trading opened with a dramatic spike on Sunday, but are still holding above support at the 58 level – which previously was the upper level of range-bound price movement since mid-July. Traders likely will be looking for a breakout above 60 as a sign of a continued upward swing.

A final note: today is Quadruple Witching, so be on the lookout for heightened volatility as this trading week draws to a close.

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