Last Week Ends on a Sour Note. Attention Shifts to FOMC

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Our View

Well, last week’s “Triple Witching” has come and gone. The session was weak all day, as they pinned SPX 4500 for most of the week. As those positions were unwound into opex, weakness ensued and the 4450 level became the area of interest.

We’ll see how a VIX on the lower end of its range and the recent price action develops as the FOMC event is on tap later this week. So far, the market expects “no hike” from the Fed, pricing in a dependable 99% certainty the Fed holds rates steady this week.

There really is no trend right now — it's a big two-way chop.

That's why I always say to get in, get out and don’t fall in love with your positions. Are we going up or down this week? The simple answer is both, but I think the bias is down in the short term.