☕ Have your “buy list” ready, it’s quad witching day!

Good morning! 👋 

It’s Hayley here while Keith adjusts to a new time zone.  

Markets have opened in the green after three straight down days for the S&P 500. The backdrop is still the same: investors are digesting delayed U.S. jobs data showing weaker hiring, but still limited layoffs, which has left many feeling cautious. 

Proof positive of something Keith talks about frequently. 

“Investing in optimism beats cowering in pessimism any day, every day.”  

Now… 

If you’re feeling a little twitchy, and you wouldn’t be alone if you are, there’s a bigger reason - and it has nothing to do with headlines. 

Today is quadruple witching. 

If you’re unfamiliar with the term, that means this is one of four Fridays a year when stock options, index options, index futures, and single-stock futures all expire at once.  

Goldman Sachs estimates that more than $7 trillion worth of options exposure rolls off the board today - the biggest expiration on record. (Read) 

In plain English, a meaningful slice of the entire U.S. market is being forced to reset positioning in a single session.  

When that much money resets at the same time, prices can move quickly or behave in ways that don’t always line up with the news. 

And importantly, this can happen even though nothing has changed about the underlying businesses themselves. 

In other words, a lot of the recent volatility is likely driven more by this mechanical process than by fundamentals.  

And as Keith would also remind you, this isn’t something to fear or try to trade against. You’re not meant to compete with institutions fighting over short-term hedges and positioning. 

Instead, this kind of forced activity can temporarily push prices away from fair value - sometimes lower, sometimes higher - for purely technical reasons. 

That’s where opportunity tends to show up for smart investors. 

Quadruple witching is a… 

• chance to stay disciplined 

• to let prices come to you 

• and to add quality names like those we talk about regularly  

• when the market offers it - without feeling pressured to act 

Keith urges you to keep a simple buy list for moments like this.  

I do. 

Not because I know what happens next, I don’t, but because I know how I want to behave when markets get noisy. 

One more thing worth keeping in mind as we head into the final stretch of the year is seasonality. 

Historically, this period has tended to favour investors who stay engaged.  

The so-called “Santa Claus rally” has been positive in 19 of the last 25 years, about 76% of the time, with an average gain of roughly 0.8% over that short window. Even more interesting, over 56 years of data, there’s never been three negative Santa rally years in a row. 

That’s not a guarantee, and it’s not a reason to chase. 

But it is a reminder that volatility and opportunity often travel together, especially when positioning resets and seasonality starts working in investors’ favour.  

As Keith mentioned on Varney earlier this month, a Santa rally is still very much in the cards even though it may not feel like it. (Watch) 

If you don’t have a buy list yet, or you want to compare notes, you know where to find him. 

He would no doubt encourage you to start with the big quality names, especially those that have been beaten down the most. 

With that, you’ve got this. I promise. 💯 

As always, let’s MAKE it a great day and finish the week strong. 

Hayley E 😀 

PS – If you’re an OBAer, keep your eye on your email as I’ve just heard from Keith who is in search of lots of cookies, caffeine and gasoline (even though it’s pouring rain in the PNW - he's a little crazy if you ask me). If I know Keith, I’ll bet pounds sterling against US dollars that you’ll hear from him later today or tomorrow!