<ul class="summary-list"><li>Stocks could face more choppiness than usual during the lead-up to the next so-called <keyword id="11445777" type="UNKNOWN" weightage="60" keywordseo="quadruple-witching">quadruple witching</keyword> event on Friday, said <keyword id="4607495" type="PERSON" weightage="60" keywordseo="fundstrat">Fundstrat</keyword>'s Tom Lee.</li><li id="recirc">The head of research soaring options activity in the last year could cause the witching to create more volatility. </li><li>The event occurs when single stock options, single stock futures, index options, and index futures all expire on the same day.</li></ul><p>Stocks could face more choppiness than usual during the lead-up to the market's next so-called quadruple witching event on Friday, warned Fundstrat's Tom Lee.</p><p>In a Monday note, the head of research said that the contract expiration event could have a bigger impact on the market because options activity has nearly doubled since the start of 2020.</p><p>In the past, the <keyword id="11445776" type="UNKNOWN" weightage="60" keywordseo="quad-witching">quad witching</keyword> event has been viewed as a driver of short-term market volatility. The event occurs when four types of contracts all expire on the same day: single stock options, single stock futures, index options, and index futures.</p><p>With heightened interest from both retail and institutional investors, options activity has nearly doubled since the start of 2020, compared to a 22% uptick in equity volumes. This is making the market more vulnerable to quad-witching induced choppiness, Lee said.</p><p>"One reason options expiries create greater impact, is options activity is soaring relative to cash volumes," he said, noting that call volumes have exploded 92%, will S&amp;P 500 index volumes are lower today than they were in 2002.</p><p>He continued: "Even if options are cash settled, there is impact on the underlying instruments (single stocks or indices), because of the related hedging/positioning involved in the original position. In other words, if options volumes soar, these will have an impact on stocks/indices. And to the extent options volumes surge, the expiry would have a greater proportionate impact."</p><p>During the previous quad witching in March, selling began four days before the expiration date. Lee expects stock market gyrations around Friday's event. </p><p>While "the vast majority of investors" shouldn't be taking any action, Lee prefers to trim positions early this week and buy stocks towards the middle of next week. </p><p>The strategist emphasized that the "future is uncertain" and his predictions could "be totally wrong."</p><p>"However, recall, we wrote a similar analysis of quad witching ahead of the March expiry.  And indeed, the March 19th 'quad witching' created some chop," he added.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/stocks-to-buy-meme-stocks-amc-gamestop-reddit-best-short-squeeze-fintelio" target="_blank" rel="noopener">These 5 stocks are prime candidates for an explosive AMC-style short squeeze right now, according to data from Fintel</a></em></p>

Brace for more stock volatility than usual as 'quad witching' descends upon markets this week, Fundstrat's Tom Lee says

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/529e0361ecad04cc6b2d6b9f-2400/stock-exchange-traders.jpg" alt="stock exchange traders" data-mce-source="Scott Olson/Getty Images" /><p class="source"><span>Scott Olson/Getty Images</span></p></div><p></p></div></div>Dave Lutz, the head of Exchange Traded Funds at JonesTrading, has an overview of what is happening in markets:</p><ul><li>It's <a href="http://www.businessinsider.com/triple-and-quadruple-witch-explained-2013-5">quadruple witching Friday</a>, the once-a-quarter day when <span>various stock index futures, stock index options, stock options, and single stock futures expire. <span>These days have become known for the unusual level of trading that takes place on or around them, and they have been named "witching" days after the three witches of Shakespeare's "Macbeth."</span></span></li><li><span><span>Treasurys are stronger after six days of selling, while the dollar is pulling back from the 14-year high it hit after the Fed raised interest rates on Wednesday. </span></span></li><li><span><span>In economic data, housing starts and building permits for November cross at 8:30 a.m. </span></span></li></ul><p><span><span>Here's Lutz:</span></span></p><p style="padding-left: 30px;">Good Morning, and Happy Quad Witch Friday!   Should be an active session for the quants, with many ETFs going Ex-Divvy (Like SPY) and multiple Index families doing rebalances.   Spoos are trading about 20bp higher as expiry magnets prevail into the opening.   Over in Europe, Pretty much a sea of green, Euro Stoxx 50 Erases 2016 Drop with the DAX climbing 30bp and busting upside 11,400 - with every sector climbing.   Banks act well across the continent, despite the overnight pullback in Yields.   Monte dei Paschi di Siena don't seem to be sparking activity, while Stockholm's exchange continues to see outflows.  FTSE thru 7,000 and a rebound in the miners has London up 40bp.  In Asia, Nikkei climbed 60bp - Shanghai gained small, but had the largest weekly loss in 8months - Aussie was down small, and EM Asia bouncing back small from the week's drubbing.<span> </span></p><p style="padding-left: 30px;">Treasuries reversing six days of declines and the DXY retreating from 14yeat highs as a sense of calm prevailed in FX overnight.   China continued to weaken the yuan to the weakest level since May 2008, but HIBOR retreated and $/Y consolidates.   A Sharp bid to Bunds has Treasury Yields off 30bp, while the Euro's gains offset losses from the commodity currencies.    WTI up 75bp into the Rig Count later today, but Natty Gas continues to get clubbed on the weather forecasts.    Gold clawing back from February lows, but Copper is off nearly 1% as Ore retreated in China. </p><p style="padding-left: 30px;">Ahead of us today, we get Housing Starts and Building Permits for November at 8:30 - The 1<sup>st</sup> FOMC speaker since the Hike is on deck at 12:30 when Richmond's Lacker (Hawk, Non-Voter) and Bank of America's Moynihan Speak in Charlotte.  At 1pm we get the Baker Hughes Rig Count, and at 3:30 the "Commitment of Traders" data hits.   For Expiry - Options on Index and futures on the open (They expired yesterday yet the settlement value is determined on the opening print), while Options on Singles and ETF's expire on the closing 4pm bell.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/fed-federal-reserve-raised-rates-janet-yellen-explain-why-2016-12">Watch Yellen explain why the Federal Reserve decides to raise rates</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="9iN245ODE6FzNRBdC0_U12Pgj2-fdpNL" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', '9iN245ODE6FzNRBdC0_U12Pgj2-fdpNL',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Here's a super-quick guide to what traders are talking about right now

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/576e38e85124c9e9793fca26-800/wall-street-eyes-low-rates-earnings-after-brexit-rout.jpg" alt="Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2016.  REUTERS/Lucas Jackson " data-mce-source="Thomson Reuters" data-mce-caption="Traders work on the floor of the New York Stock Exchange (NYSE) in New York" /><p class="source"><span>Thomson Reuters</span></p><p class="caption">Traders work on the floor of the New York Stock Exchange (NYSE) in New York</p></div><p></p></div></div></p><p><strong>Dave Lutz, head of ETFs at JonesTrading, has an overview of today's markets.</strong></p><ul><li><a href="http://markets.businessinsider.com/indices">US markets are looking at a higher open on Friday and heavy volume is expected.</a></li><li><a href="http://markets.businessinsider.com/commodities/oil-price?type=WTI">WTI oil is trading higher amid Iran angst.</a></li><li><a href="http://markets.businessinsider.com/currencies/BTC-USD">Bitcoin is at fresh highs.</a></li></ul><p><strong>Here's Lutz:</strong></p><blockquote><p>Good Morning!  We have a heavy volume session ahead of us, with the "Quad Witch" (expiration of stock options, index options, index futures and single stock futures), S&amp;P and Nasdaq Rebalances, and it's SPDR Ex-Divvy Day, including SPY, QQQ, XOP, XBI, and all the "XL" ETFs.   Tax Angst (Smells like normal DC Positioning to me, but we'll see) from yesterday being shrugged off early, with Russell rebounding 40bp from yesterday's selloff.   Continental Europe all under pressure, with Consumer getting whacked on H&amp;M and Ferragamo headers, while Fins and Tech see selling - pressing the DAX down 30bp.   FTSE is outperforming into their rebalance on the close, with weakness in Banks being offset by a nice pop in Miners.  In Asia, Nikkei down 60bp for 4 straight as Yen broke higher and Telecom got smoked as DB downgrades KDDI - Hang Seng lost 1.1% despite the pop in Li&amp;Fung as Tech weakened - Shanghai 80bp as Chinese banks got hit on the PBoC Hike - KOSPI added 50bp, while Aussie off 25bp as banks continued to see selling</p><p>The US 10YY is basically unch, but eyes are on Bund Yields trying to hold 30bp, while Portugal's yields are dropping quick ahead of a Fitch Review.   DXY has a slight bid, with Euro drifting around $1.18, but the Pound is struggling to hold $1.34 - The $/Y approaching 112 as Tankan shows confidence at 11Y highs, while the Lira trying to claw back from yesterday's smash.   Ore was up 2% in China, and Nickel is up 1% and Copper 30bp.  Gold adding to yesterday's gains early, adding 30bp.  Focus remains on the Energy Complex, as the Forties Pipe Outage and Iran Angst continue to support WTI and Brent despite headers of increasing production. </p></blockquote><h2><a href="http://markets.businessinsider.com/news/stocks/stock-market-news-opening-bell-december-15-2017-2017-12-1011530910">Here are the 10 things you need to know today.</a></h2><p class="tagline">Get the latest Oil WTI price<a href="http://markets.businessinsider.com/commodities/oil-price?type=WTI"> here.</a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/fed-already-preparing-for-next-recession-2017-11">The Fed is trying to prepare for the next recession without causing it</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/HQ5OH9qO-xjRU7l6Z.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

<p><span class="KonaFilter image-container display-table float_right"><span><span data-post-image="" class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5494925369beddad6291292c-1200-924/roulette-gambling-bull-bear-frankfurt-germany-stock-exchange-2.jpg" border="0" alt="roulette gambling bull bear frankfurt germany stock exchange"><span class="source"><span>REUTERS/Alex Grimm</span></span></img></span><p></p></span></span>Stocks gained ground on Friday to finish a wild week that saw the S&amp;P 500 gain almost 100 points from the close of trade Tuesday to the close on Friday. Late in the day on Friday, the S&amp;P 500 peaked above its all-time closing high, but closed off this level, though each of the three major US indexes gained more than 2% on the week.&#xa0;</p>
<p>First, the scoreboard:</p>
<ul>
<li>
<strong>Dow:</strong> 17,806.4, +28.2, (+0.1%)</li>
<li>
<strong>S&amp;P 500:</strong> 2,070.6, +9.4, (+0.4%)</li>
<li>
<strong>Nasdaq:</strong> 4,765.4, +17, (+0.3%)</li>
</ul>
<p><span style="line-height: 22.5px;">And now, the top stories on Friday:</span></p>
<p style="padding-left: 30px;"><span style="line-height: 22.5px;">1. Stocks rose for the third straight day and the S&amp;P 500 went out at an all-time high for the 50th time this year. In an email on Friday afternoon, the NYSE's Rich Barry captured the mood on the exchange floor, writing: "<span>After a whopping 4.5% rally in just two days - the best 2-day rally in over three years - what can the market possibly do for an encore?! Finish out the last full week of the year with a bang? Set a single-day volume record in light of today's quad-witch/index re-balancings?? At this point, anything is possible, but we still believe this market has some room to go higher." And higher the market went.&#xa0;</span></span></p>
<p style="padding-left: 30px;"><span style="line-height: 22.5px;"><span>2. Friday also marked a "quadruple witching," as expirations for stock index options, stock index futures, single stock options, and single-stock futures all expired on Friday. As a result, volume was heavy on the NYSE, with Barry noting that volume on Friday was 232% higher than its three-month average.&#xa0;</span></span></p>
<p style="padding-left: 30px;"><span style="line-height: 22.5px;">3. Oil rallied on Friday, with West Texas Intermediate crude futures gaining more than 5% at one point to nearly $59 a barrel. The rally in oil came as the commodity remains at the center of the market's attention. The number of US oil rigs in operation, however, declined again last week, <a href="http://www.businessinsider.com/baker-hughes-rig-count-december-18-2014-12">according to the latest report from Baker Hughes.</a>&#xa0;Baker Hughes said that US rigs in operation fell by 18 to 1,875 after last week showed that 27 rigs fell out of operation, which was the biggest weekly drop in almost two years.&#xa0;</span></p>
<p style="padding-left: 30px;"><span style="line-height: 22.5px;">4. And while things calmed down a bit in US markets, the global economy, particularly for countries tied to oil, remains unsettled. On Friday, the Nigerian central bank <a href="http://www.businessinsider.com/nigeria-imposes-capital-controls-2014-12">imposed capital controls</a>, limiting currency dealers in the country from depositing funds overnight, preventing after-hours trading and bets placed for or against a single currency.</span></p>
<p style="padding-left: 30px;"><span style="line-height: 22.5px;">5. The biggest headlines on Friday were away from the stock market, as the <a href="http://www.businessinsider.com/us-official-north-korea-hacked-sony-and-china-may-have-helped-2014-12">FBI officially blamed</a> North Korea for the Sony hack that has lead, among other things, to Sony canceling the premier of the movie "The Interview." In a news conference on Friday, president Obama said the hack "caused a lot of damage, and we will respond." Business Insider's <a href="http://www.businessinsider.com/what-the-us-can-do-in-response-to-the-sony-hack--and-the-risks-for-each-2014-12">Military &amp; Defense staff has the breakdown</a> of the various options the White House now must weigh.&#xa0;</span></p>
<p><strong><span style="line-height: 22.5px;">Don't Miss: <a href="http://www.businessinsider.com/howard-marks-on-oil-2014-12">Howard Marks Gives A Crystal-Clear Explanation Of How Oil Prices Work »</a></span></strong></p>

STOCKS RISE TO FINISH A WILD WEEK: Here's What You Need To Know

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/56e16a8e91058428008b5640-711-533/futures-up-ahead-of-ecb-move-on-stimulus-2016-3.jpg" alt="Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York March 9, 2016. REUTERS/Lucas Jackson" data-mce-source="Thomson Reuters" data-mce-caption="Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York " /><p class="source"><span>Thomson Reuters</span></p><p class="caption">Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York </p></div><p></p></div></div>Via Dave Lutz at JonesTrading, here's a super quick guide to what traders are talking about right now:</p><p style="padding-left: 60px;">Good Morning, and Happy "Quad Witch" <span class="aBn" data-term="goog_1847689353"><span class="aQJ">Friday</span></span>!<span>  US Futures continue to move higher</span>, gaining 25bp despite The Daily Sentiment Index (DSI) for S&amp;P at 81% Bulls flashing overbought conditions.   This mirrors higher markets overseas, which sees the DAX up 25bp as Banks are rebounding across Europe.  Commodity stocks continue to rally, and the Discretionary sector is catching a bid as the Euro retraces its recent strength.  In London, the FTSE is up 55bp on the back of Fins and Miners.   Volumes are higher overseas, with most markets trading 20-30% above recent turnover.   In Asia, Shanghai reached 1m highs as the Yuan jumps, Home Prices surged higher, and chatter increases PBOC may expand Margin Financing - Macau +8% was stronger on no specific news as beaten up names saw a bid - Nikkei was 1.3% weaker as yen strength weighed, and Aussie closed up small as commodity stocks rallied.<span> </span></p><p style="padding-left: 60px;">There is acute focus on JGBs, as Japan's 10-yr bond yield dropped to a record -0.13bp on dovish headers from the BOJ and a weaker reverse-auction.  This is driving Germany's 10YY to 20bp, and has Treasuries languishing under 1.9% again this AM.  The DXY is recovering from 5M lows as the Euro heads south as ECB's Praet hints at further cuts, while the Yen finally sees some weakness.   Commodity currencies are under some slight pressure as the complex consolidates gains.   China Iron Ore, Steel Futures leapt higher as Home Prices Surge, and has Copper and Silver higher despite the stringer $.  Gold is seeing some profit-taking, losing 80bp.   Focus remains on the Oil complex, and we have WTI stretching its legs above $40 early, adding another 2% to yesterday's rally into Expiration <span class="aBn" data-term="goog_1847689354"><span class="aQJ">on Monday</span></span>.   Natty Gas continues to see covering, driving it closer to that $2 mark.<span> </span></p><p style="padding-left: 60px;">We have heavy volume ahead of us, as <span class="aBn" data-term="goog_1847689355"><span class="aQJ">this Friday</span></span> brings not only Options Expiration, but heavy rebalances (S&amp;P, FTSE, DJ, MSCI), and a gaggle of ETFs going Ex. Divvy (Including SPY).   At <span class="aBn" data-term="goog_1847689356"><span class="aQJ">8:30</span></span> we get Canadian CPI and Retail Sales, followed at 9 when Fed's Dudley Gives Opening Remarks at Supervision Conference.  10 brings us University of Michigan Survey, and at 11 Fed's Rosengren Speaks on a Panel.   At <span class="aBn" data-term="goog_1847689357"><span class="aQJ">1pm</span></span> we get the Baker Hughes Rig Count, and Fed's Bullard Speaks at Policy Forum in Frankfurt at <span class="aBn" data-term="goog_1847689358"><span class="aQJ">2pm</span></span>.   CFTC's "Commitment of Traders" data posts at <span class="aBn" data-term="goog_1847689359"><span class="aQJ">3:30</span></span> to close out the week.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/paul-krugman-investment-tips-2016-2">Paul Krugman gave us his top 3 investment tips</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="xudmZhMTE6S5SEv1FarlRUAQbNObnowO" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'xudmZhMTE6S5SEv1FarlRUAQbNObnowO',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Here's a super quick guide to what traders are talking about right now

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/541c194069bedd245683488e-1200-924/london-bond-trader-scotland.jpg" alt="london bond trader scotland" border="0"><p class="source"><span>REUTERS/Toby Melville</span></p><p class="caption">A trader at IG Index looks at his screens, in central London September 19, 2014</p></img></div><p></p></div></div>JonesTrading's Dave Lutz has what traders are buzzing about right now.</p>
<p style="padding-left: 30px;"><span>Good Morning, and Happy <span class="aBn" data-term="goog_1533738655"><span class="aQJ">Friday</span></span>!   Heavy volumes today, as Scotland votes "NO" / We have a "Quad Witch" expiry (Futures and Index Options expire on Open, Single Stocks on the close) / a S&amp;P and EuroStoxx rebalance / The Alerian MLP Indicies rebalance, along with the ARCA Gold Miners / The BABA comes / Finally the S&amp;P trades ex-dividend (SPY).  (Rebal details will be in WTAW).  Other Scheduled Catalysts today include US LEI at 10 - there is NO POMO at 11 - Moody's French review after <span class="aBn" data-term="goog_1533738656"><span class="aQJ">11:30</span></span> -  Baker Hughes Rig Count at 1, and "Commitment of Traders" data at <span class="aBn" data-term="goog_1533738657"><span class="aQJ">3:30</span></span> <br /></span></p>
<p style="padding-left: 30px;">BABA was priced conservatively at $68, chatter it is trading 30% higher in the Grey market, while YHOO is marked up 1% (ISI says YHOO will move .89 for every $5bn in BABA valuation).   We have futures marked higher, led by a 40bp pop in the Russell.   The FTSE is the best performing market over in Europe, as Scotland votes 55% "NO" - Scottish exposed shares leading the upside.   Spain's market is close behind, as yields are 8bp tighter as Scot vote dampens Catalonia fears.   We have heavy volume overseas, with the DAX and FTSE trading 2x normal, but probably due to rebalance/expiry.    We have some stress though, as the DAX is well off it's best levels as Euros move toward Bunds - may be some Ukraine stress building into the weekend, as the MICEX is off 1.5% early.    We also need to stay aware of the Moody's review of France after the EU close - Heavy chatter they will downgrade earlier in the week, which French officials are decrying as "false" this AM.</p>
<p style="padding-left: 30px;">Over in Asia, Tokyo jumped to its highest level since November 2007 after Prime Minister Shinzo Abe said he would quickly reform the country's $1.2tn pension fund so it could buy more stocks, and the Yen got slammed against the surging Dollar.   Keep an eye on the British Pound, having rallied over recent days in anticipation of a No vote, the pound seems to be suffering from a classic case of "buy the rumor sell the fact" as it loses ground against the $.    US 2YY are retreating from 3Y highs, and while the 10Y Treasuries and Bunds are flat - they have reversed overnight losses pretty quickly.    With the $ rallying, we continue to have a headwind for Commodities.   Brent is flat, but WTI is under pressure into <span class="aBn" data-term="goog_1533738658"><span class="aQJ">Monday's</span></span> expiry - while the metals remain under pressure - Silver 1Y+ lows.   Grains and Beans?  They still hate 'em as chatter increases of transportation issues.</p>

Here's A Quick Guide To What Traders Are Chatting About Right Now

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/541ac444eab8ead2152c5cad-1200-924/london-futures-options-traders.jpg" alt="london futures options traders" border="0"><p class="source"><span>REUTERS/Dylan Martinez</span></p><p class="caption">Traders in the city conduct business at the London International Financial Futures and Options exchange (LIFFE) trading floor in the city, August 17, 1994.</p></img></div><p></p></div></div>Dave Lutz of JonesTrading has the roundup of what traders are buzzing about right now:</p>
<p style="padding-left: 30px;"><span>Good Morning!   Animal spirits are en fuego, with the Russell Minis marked up 70bp, almost a double from S&amp;P and NDX futures.   A slew of factors:  Hedges coming off against Fed and Scotland (Still too close to call, but "no" camp strengthened in final polls) / China makes a 2<sup>nd</sup> easing move this week, cutting Repo rates - WSJ says similar moves in the past have indicating broader easing / Kuroda said BOJ will continue to ease until 2% inflation stable, Yen breaking down / SNB slashes Swiss growth outlook / demand for the first ECB TLTRO was only €82.6B vs. expectations of ~ €135-150B - sparking QE hopes / Grey Market has BABA trading 30% above high end of range.<span> <br /></span></span></p>
<p style="padding-left: 30px;">Overseas, the FTSE remains cautious heading into the Scotland Results (due 3amET <span class="aBn" data-term="goog_1727586743"><span class="aQJ">Friday</span></span>, but Nomura says prepare for a delay) - Sterling is up, but implied volatility on that British Pound is off the rails.  Most of Europe is rallying 1% in very decent volume, the DAX trading 1.5x normal.  No angst in French equities or Credit, despite chatter Moody's to downgrade <span class="aBn" data-term="goog_1727586744"><span class="aQJ">tomorrow</span></span>.   Russia's MICEX is trying to bounce from yesterday's smackdown.  In Asia, The Nikkei was focused on Yen and not Sony - Closed up 1%.  China gained 30bp, but Hang Seng gave up most of yesterday's gains as the Chinese liquidity injection into the Banks is viewed as temporary for upcoming holiday-cash needs.    Down in Aussie, the Miners weighed as the A$ fell and commodity prices are dropping overnight.<span> <br /></span></p>
<p style="padding-left: 30px;">The US 10YY is nearing unchanged, after being off 2bp early, while that "policy-sensitive" 2YY is ticking near 3Y highs.    Asians had the $ much stronger overnight, but we are watching it drift back as US and EU players emerge.   Commodities are not enjoying the headwind - with Gold and Silver off 1%, and despite bullish headlines on supply cuts, the Oil complex remains in the red.     Scheduled Catalysts today include Weekly Claims at <span class="aBn" data-term="goog_1727586745"><span class="aQJ">8:30</span></span>, Fed's Yellen Speaks on Consumer Finance at <span class="aBn" data-term="goog_1727586746"><span class="aQJ">8:45</span></span>, Philadelphia Fed at 10, a tiny POMO at 11, and a TIPs re-opening auction at 1.   BABA prices tonight, trading ~30% higher in the gray market ($88/share) - and we should have results from Scotland starting around 7pmET.<span> <br /></span></p>
<p style="padding-left: 30px;"><span class="aBn" data-term="goog_1727586747"><span class="aQJ">Tomorrow</span></span> brings a wild day of volume - We have a "Quad Witch" expiry (Futures and Index Options expire on Open, Single Stocks on the close) / We have a S&amp;P and EuroStoxx rebalance / The Alerian MLP Indicies rebalance, along with the ARCA Gold Miners / Finally the S&amp;P trades ex-dividend (SPY)….</p>

<p><div class="KonaFilter image-container float_right"><div class="image on-image"><img src="http://static2.businessinsider.com/image/52b4379cecad042743f848cd-1094-820/telephone-3.jpg?maxX=480" border="0" alt="telephone" width="480" /><p class="source"><span><a href="http://www.flickr.com/photos/zigazou76/7670203300/sizes/h/in/photostream/">zigazou76 / Flickr, CC</a></span></p></div><p></p></div>Dave Lutz of Stifel, Nicolaus passes along the top stories that traders are chatting about this morning:</p>
<p style="padding-left: 30px;"><span>Good Morning, and Happy </span><span class="aBn" data-term="goog_874336682"><span class="aQJ">Friday</span></span><span>!   US Futures are showing a mild uptick this AM as we have Index rebalances and a "Quad Witch" options expiry today - Estimate that passive index funds will generate about $10.8B per side in flows across the three indices - Also a reminder that S&amp;P ETFs go Ex. Dividend today as well.   Overseas markets continue to trend higher, led by a 35bp pop in Germany's DAX, as it nears a new all-time high.   Volume is very heavy in Europe on rebals - with volumes 50-250% above the recent averages.   Eyes remain on Turkey's market, which is bouncing small following this week's sharp declines.    In Asia, the Nikkei managed to eek out a small gain, but hits a new 6Y closing high as the BOJ affirmed a very accommodative stance.  The eyesore was in China, however, as interbank rates surge sharply overnight, hitting Shanghai for 2% to it's lowest in 4 months - The Shanghai Composite has fallen for nine sessions in a row, its worst run since 1994 - Aussie liked the cash injection - popping the ASX by 1% in heavy trade.   The tide was mixed in emerging markets - with India continuing to surge higher, adding 1.7% - while Tapering flows continue to weigh on Indonesia, Thailand, Mayalsia, etc as US yields drift higher.</span><br /><br /><span>The 10YY in the USA rests near recent peaks at 2.94%, and seem destined to test the September 3% peak.   Many bond players are seeing flows into 30Y, as the yield there continues to slide sideways/lower post-FOMC.  The DXY is higher, mostly against Yen - while the € is off only small despite the S&amp;P downgrade of the union.  With the $ higher, we have a headwind for commodities -but industrial metals are showing a upward trajectory right now - but  Gold continues to flounder near 3Y lows.  WTI remains near yesterday's peaks (induced by the Senate Iran sanctions bill?) - While Brent has a decent bid as yield projections from a major Norway field are reduced.   Corn is under pressure again, as more headlines of Chinese rejected shipments mount.   We have our GDP (3rd revision) </span><span class="aBn" data-term="goog_874336683"><span class="aQJ">today at 8:30</span></span><span>, BLS State Unemployment at 10, KC Fed and a small POMO at 11 today.</span><br /><br /><span>For the rebalance today - In the S&amp;P 500, ADS and MHK have the largest weight increase, while AAPL, PFE and XOM have the largest weight decrease. In the Midcap, BC, ODFL and TER have the largest weight increase, and ADS, MHK and ACI have the largest weight decrease. In the SmallCap, ACI, SCHL and RGS have the largest weight increase, while BC, ODFL and LINC have the largest weight decrease. Largest sector adds are IT and largest deletes Fins. (TY Camo Man)</span></p>

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