TRIPLE WITCHING FRIDAY: MARKET BRACES FOR $4.5 TRILLION OPTIONS EXPIRATION

Market Recap – Friday, March 21st, 2025 (Author: Jamar)

📊 Macro Headlines & Premarket Sentiment

• Triple Witching Day: $4.5T in options expiring = volatility fuel.

• S&P Futures opened weak, targeting 5680 → 5662 → 5625 as support zones. Resistance at 5720 → 5760 → 5800.

• VIX remains above 20, reflecting lingering uncertainty.

• Bonds stable, USD rebounding. Commodities faded.

• Geopolitical tensions escalating: Middle East airstrikes + U.S./China tariff battle heating up. Crude oil rallied on Iran sanctions.

• Europe down on Heathrow airport shutdown. Asia mixed on tariff jitters.

MARKET OVERVIEW

Markets are showing significant caution heading into today's Triple Witching options expiration, with approximately $4.5 trillion in options set to expire. S&P futures indicate a lower open with key support at 5680, 5662, and 5625. The VIX remains elevated above 20, suggesting continued volatility as tariff concerns persist ahead of the April 2nd deadline. Geopolitical tensions are rising with Middle East airstrikes and fresh U.S. sanctions on Iran pushing crude oil prices higher. Fed officials Goolsbee and Williams have noted increased uncertainty in the economy, with businesses showing anxiety over trade tensions and potential stagflationary pressures.

📈 Top Momentum & Profit-Rated Trade Ideas

Bullish Standouts

• SMCI +1.3% (JPM upgrade, AI sector strong)

• CURV +3.8% (positive earnings)

• LMT +1.3% (defense bids amid military contract buzz)

• NXT: Bull flag breakout above $46 targets $49-$50. Large put selling OI = confidence.

• BV: Insider accumulation + share buyback + technical bounce. Targets $17–$22 (short float 4.8%).

Bearish Sentiment

• FDX -5.5%, NKE -4%, MU -3.4% (earnings disappointments).

• PL -10.5%, QUBT -9%: High momentum downside.

Bullish:

• Energy (XOM, CVX, SHEL) - Benefiting from Middle East tensions and Iran sanctions

• Defense (LMT) - Geopolitical tensions driving sector strength

• AI/Technology Infrastructure (SMCI, MU) - Data center growth and AI demand

• Healthcare (ALNY, JNJ) - FDA approvals and increased domestic investment

• Consumer Staples (CL) - Dividend increase and buyback announcement

Bearish:

• Retail/Consumer Discretionary (NKE, FDX) - Guidance cuts and consumer weakness

• Manufacturing (X, NUE) - Steel sector guidance cuts on pricing pressure

• Chinese Stocks (PDD) - Tariff concerns and Nomura downgrade

• Tech/Growth Stocks - Continued sector rotation out of tech visible in NVDA's death cross

🧠 Earnings + News Catalysts

• MU: Beat on earnings, strong FY Q3 guide, AI data center demand driving growth.

• NKE: Beat expectations but lowered guidance. Macro consumer weakness showing.

• FDX: Missed EPS, mixed guide. Inflation and tariffs cited as pressure.

• LEN: Beat and guided strong housing deliveries.

💡 Options Flow + Smart Money Signals

• APP: 300 June $260/$350 call spreads – high risk/reward AI play.

• CRM: 1500 June $300 calls bought → bullish bet on Q2 upside.

• DLTR: 3000 Aug $55 puts bought → hedging retail sector softness.

• DHR: 2000 April $220 calls bought → rebound off base + big volume pocket.

📈 Technical Scans

MACD Bull Cross:

• TSLA, PLTR, GOOG, SHOP, COIN, DASH, APP, CRWD

13/34 EMA Bull Cross:

• UBER, COP, CROX, INSM, SPR, BBIO

Inside Day (Possible Breakouts):

• NVDA, TSLA, NFLX, AVGO, ABBV, PANW, CRWD

🧵 Social Sentiment Drivers

🔥 Elon Musk Blitz:

• $TSLA buzz on Optimus robot legion, supersonic jet comments, and Pentagon briefings.

• Starlink greenlit in Pakistan; DOGE enthusiasm surging.

• Trump backing Musk, threatening jail for Tesla saboteurs = retail energy spike.

🚨 Crypto Market Catalyst:

• DOGE & BTC seeing pre-market accumulation amid Elon/Musk engagement.

• UAE Crypto Czar meetings signal Middle East bullish stance.

• Watch for breakout attempts in DOGE, FLOKI, INJ, LINK, and ORDI.

⚠️ Key Market Risks to Watch

• Tariff escalation into April 2nd – potential downside catalyst.

• Volatility resets post-OPEX → Q2 positioning shift expected.

• Economic soft patch + rising inflation risk = Stagflation whispers increasing.

TRADING STRATEGY FOR TODAY

Given today's Triple Witching expiration, expect elevated volatility and potential whipsaw price action. The most prudent approach is to:

1. Size positions conservatively given the $4.5T option expiration

2. Focus on relative strength in defensive sectors like energy and healthcare

3. Wait for confirmation on breakouts/breakdowns due to potential false signals

4. Use wider stops to account for expected volatility

5. Consider closing short-term positions ahead of the weekend to avoid overnight risk

The market remains at a critical inflection point with geopolitical and tariff concerns weighing on sentiment, while energy and defensive sectors provide potential safe havens. Closely monitor Fed commentary and Trump statements regarding April 2nd tariffs.

📌 Final Thoughts: Friday Wrap-Up (March 21st)

• Premarket weakness turned into a chop-fest early due to OPEX. Clear inflection levels remain in ES1!: 5686, 5720, 5750.

• Crypto sentiment is improving, especially on DOGE, BTC, and AI tokens.

• Stock market trades look best when playing post-OPEX breakouts, especially in names like SMCI, CRM, and APP.

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