With Quadruple Witching hour loomin over our heads, I predict today that equity markets are headed south. I expect oil to hit a record high of $160 per barrel as the Chinese fail to raise taxes to cut demand for gasoline consumption in their country.
Now this is about as rediculuos as the rumor sparked by Vice President Cheney stating the Communists Chinese drilling for oil off the cost of Florida. Granted, Cheney later rescinded the argument, but we are in weird times and the quadruple witching hour will make it no less.
The spell of the hour, the brings a burst of activity as option and future traders try to close positons creating swings in market volumn. This witching hour should be entail more activity with the recent rule change of automatic option exercising of in money options of only one cent. Previously options had to be in the money greater than $0.05.
It gives me a strange feeling that this change was introduced just in time for quadruple witching when it could have easily been pushed out to the July expiration date. Not that I’m a big player in the options market, but sometimes I think somebody is brewing up some trouble.