Watch before Friday 930 EST | Stock Market Quadruple Witching

everyone be kevin here tomorrow is

quadruple witching day and by now

there's a good chance you've

either heard somebody talk about this

and going

quadruple watching day or you've seen a

tick tock on it or you've seen

something talking about quadruple

witching day and how oh my gosh

all these things expire and happen

tomorrow in the stock mart and

volatility is gonna be up folks let's

explain what this is

this is something to actually care about

so basically quadruple witching day is

something that happens four times a year

and it's when you get this alignment of

dates on the calendar

it's when market index futures options

futures stock options and a stock

futures all

expire on the same day and all this

leads to

is more buying and selling of stuff on

the markets on a particular day

now what does it do for actual price

well before i say anything why don't we

just go back

to all four quadruple witching days that

happened

in 2020. 2020 was obviously a pretty

volatile and fearful year

and i've marked four of them on this

chart might not be able to see them

right now so we'll zoom in

because one's right here internet

doesn't look good

uh but the other one is right here

and the other one is right here and the

other one

is right here so with the exception of

the one that kind of ended out right

here

you don't really notice anything

particular about these

dates all right let's zoom into the

first day of quadruple witching in

2020. so the first quadruple witching

day was right here on march 20th which

is a big red candle we've got

negative 4.04 percent so definitely a

down day

now this was right next to the bottom of

the market last year

the bottom of the market actually

happened intraday

on the 23rd when the nasdaq had hit a

low of 6771

which the day before we closed at 6994

which is about 223 points

more this was the 23rd was the bottom of

the market

but the deepest candlestick we really

got was this quadruple witching day here

of in 2020 which was a day where this

where stocks did end up closing down

4.04

in the nasdaq which when you go down

four percent on the nasdaq you know

stuff like tesla's down like 10

that day like it's it's stuff's bleeding

right

tesla has such a higher beta uh which

means it moves at more of a

an amplification than the rest of the

market uh in both directions down and up

but anyway uh on average right so uh so

anyway this was the first day

not a really good representation right

that's a pretty big red day but we were

in the midst of a crisis

so now we go on over to june 19th so

june 19th

is right here oh and by the way it's

worth noting that yes

these bottom candle sticks right here

those represent

volume and you'll actually see they

peaked on

march 20th that means you had the most

shares traded that day

so 493 million the day before was 374

and the day after was 361. so about a

third more

shares traded if we go over to the next

date we have june

19th june 19th is right here you could

definitely see this volume bar is

substantially higher than the ones to

the left and right

left and right are about 187 and 184

million here we've got

500 million in volume but take a look at

the candlestick it's actually

very compressed in other words the highs

and lows within the day

were very close together whereas days

prior you had significantly larger

candlesticks

so in this case quadruple witching day

led to a price decline of 0.03

basically it ended flat on this

particular quadruple witching day

uh and before we only had a third more

volume

right now in this case we had about 2.5

times

more volume so you can see like with

these two examples

more volume doesn't necessarily tell you

what's going to happen with price

at least not with these two days let's

go to the next one so the next quadruple

witching day was september 18th which

was after the crash

that really started over here around

september 4th after

uh tesla uh tesla split

uh but anyway so we are going to

september 18th right here you can again

point it out with the big candlestick

here at the bottom

uh very large here this is a 537 million

versus

271 the day before and 276 the day

after uh that puts us right around

i would say uh two times so let's write

down two

x in uh volume from the day before and

after

and we were down about uh 1.3

here so we got the 18th minus 1.3

percent

okay so far we're three out of three

already here right let's now go to the

last

quadruple witching day and uh i wonder

if you could spot it out

look for that big old volume spike we

over tripled our volume on the

uh on december 18th we went from 178 to

682

to 216. so almost triple

3x the volume and the stocks

or the nasdaq that they moved 0.11

so it's kind of weird the biggest drop

we had was right in the middle of a

crash on a quadruple witching day

where the nasdaq went down 4.04 and we

had just a third more volume

but when we had two and a half x volume

we only moved

negative 0.03 percent aka flat when we

had 2x the volume

uh on september 18th we moved negative

1.3

and when we had 3x the volume on

december 18th we

moved one one percent down like

nothing right there's no there doesn't

seem to be a correlation in other words

between

volume and pricing and that's really

important because we have another

quadruple witching day coming up

tomorrow

and i'm gonna go ahead and average these

candles here there we go uh

and my expectation is it just wouldn't

be surprising for us to see a double

dip on the nasdaq and some of the stocks

were really feeling some pain

but we talked about that in a prior

video so we're not going to go super

deep on

that right now we'll just uh quickly

draw a little line here and say hey

look let's say at some point here our

bottom was around here

12 uh 299 within a day let's say we end

up dipping somewhere around

12 i don't know five okay let's let's

draw that here

12 5. that's uh roughly 10

that's roughly 10 percent above the

previous bottom we had at the nasdaq uh

which

is let's just draw another horizontal

line right here

oopsies oh i didn't grab it there we go

try another horizontal

so over here i wouldn't be surprised if

we end up dipping to something like this

if we keep seeing pain in the market but

now is quadruple witching day

going to be the day that actually

creates that kind of pain

well based on slowly like if the only

thing we were told

is hey it's quadruple witching game in

my opinion the answer is

no we're not necessarily going to see a

big plummet

solely because it's quadruple witching

day tomorrow

by looking back at the past four

quadruple witching days

even though i think there's a chance we

could end up dipping

lower to within 10 of our prior low i

don't

think and it could be but i i don't

think quadruple witching day

is going to be the reason for that

happening in other words if the market

does dip substantially tomorrow

it's not because of quadruple witching

day if the market doesn't dip

substantially tomorrow it's no surprise

because it's not going to be quadruple

witching day

it's going to be related to a rapid

acceleration and bond yields at this

point that pushes the market down lower

again or

bond yields plummet and we get a

reversal

right uh quadruple witching day solely

because volume goes up does not mean

price has to change and why is that like

logically

why is that well obviously it's because

you're all course members you've all

used the 38

off coupon code link down below and

you've joined me you've taken advantage

of this coupon before all the pricing

changes after the stimi comes in uh

tomorrow

but why really why why

really uh do we not see prices go down

when there's more volume

because think about it just because

there are more people

buying and selling does not mean the

market value of something

has to change if you have 10 buyers

buying bread

and 10 sellers selling bread you have

equilibrium

and there's some kind of market price

that gets established

that you don't have to have equal

sellers and equal buyers obviously to

have equilibrium

you get some kind of equilibrium in

price now if we

double the buyers and we double the

sellers the price should be agnostic

to that unless there are only 10 loaves

of bread between those 10

those 20 sellers right as long as each

vendor comes with one piece of bread

and there's a buyer that shows up the

amount of people trading the volume

should have absolutely no impact on the

price

my opinion what instead drives price

sentiment sentiment is what are people

thinking what are people feeling what is

the emotion of the day

what are momentum and high frequency

traders trying to take advantage of what

algorithmic signals are they trading off

every time bond yields move like a tenth

of a percent you know these machines are

going um

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it's so stupid like this is not

in my opinion a retail driven

pain that we're seeing in the market

here in my opinion this is

high frequency data traders or high

frequency traders not data traders high

frequency traders although they

use data uh it's uh hedge funds maybe

a de-risking because they're trying to

well let's just get out of tech a little

bit but hedge funds notoriously

underperform the market why because they

sell when everybody else is selling it's

stupid

and then they try to time back in they

think they can time the market folks

there's a reason the hedges

always underperform the market like i'd

rather be in an actively traded etf for

example

uh and i don't want to sound too bullish

on on arc but i'd rather be

in an arc or in an actively traded etf

than in some hedge fund that is going to

do the opposite of what we should be

doing

and what we should be doing is buying

dips and now obviously

uh you know once you start getting low

in cash uh then then wait you know wait

a little bit hey we

we could still follow some more go work

more that's what i always say

uh now i know that sounds crazy and

simplistic but but i'm serious like

it's during the times of market dips

that i always get motivated i'm like oh

all right

i guess i gotta put in some more work

i'm gonna do another like in real estate

when i was a real estate agent

uh full-time uh which obviously i'm not

a real estate agent full-time right now

but i am a real estate agent still real

broker uh when when things were painful

guess what i would do i'd get off my

butt and i'd go all right i guess i'm

doing a tuesday open house

because i need to find someone and i

found people on tuesday open houses just

because like who else was working that

day you know it's

it's amazing when we get out there and

uh you know try to grind and put some

effort into it

uh you we will find a way to make some

additional cash and for me i just be

plowing all that crap into this stunk

market

so uh anyway these are just uh my

thoughts regarding this whole quadruple

witching day

there's not that big of a deal thank you

so much for watching folks check out the

coupon code and we will see you

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later

you