When Quad-Witching Week and a Rate Cut Collide By Larry Benedict, editor, The Opportunistic Trader After closing out our ProShares Bitcoin Strategy ETF (BITO) trade for a 100% gain last Friday, we opened our next trade the same day… We bought call options on the United States Oil Fund (USO). This ETF tracks the West Texas Intermediate (WTI) crude oil price. Oil sold off heavily, but the move looks overdone. So we’re aiming to catch a bounce in the oil price. In other words, we’re looking for a mean reversion to the upside. If you recall, we saw this same scenario in June when we rode USO’s rebound for a 39.7% gain in two days. In the chart below, you can see that the current sell-off began in early July and then accelerated around the start of this month: United States Oil Fund (USO) 
Source: eSignal (Click here to expand image) That sharp sell-off came from concerns about a slowing economy. (A strong/growing economy typically increases oil demand. That pushes oil prices higher – and vice versa.) The fall also came despite ongoing tensions in the Middle East. But that sharp move lower pushed the Relative Strength Index (RSI) down to near oversold territory (right orange circle). It has rebounded higher these past couple of days. A similar V-like pattern provided the setup for our USO trade back in June (left orange circle). And that’s what I’ll be looking for around here. We were slightly early with our new trade. Yet that rebound in the RSI has pushed USO back in the right direction. Our position is looking promising. I’ll continue to watch it closely and reach out if you need to take any action. The same is true for our remaining open positions in Invesco QQQ Trust Series 1 (QQQ), Nvidia (NVDA), and Apple (AAPL). Note that our position in AAPL expires a week from today. The remaining half of the trade is right up against it and likely to close for a loss. But given that we booked a 121.3% gain on the first half, we will still have an overall profit. I’ll update you with specifics once we close out this trade. Quad-Witching Week Next week is a special period for trading opportunities… A quadruple witching happens four times a year. Index futures and index options, plus stock futures and stock options, all expire on the same day (the third Friday of March, June, September, and December). That’s when money managers look to square off their positions before those expirations, sending trading volumes and volatility much higher than usual. And our trades during these weeks have proved to be very profitable overall historically. Since we began doing quad-witching trades in The Opportunistic Trader, subscribers have enjoyed an average $465.91 gain per contract. That equates to a 50% gain. And don’t forget that the average holding period has been just 1.53 days. If you want a refresher on how it works, check out my special report here. I’m excited about next week’s action and will send out your quad-witching trade the moment the right setup appears… And, of course, there will be another catalyst for volatility in the week ahead… The Fed’s Decision The Federal Reserve meets next week to make a much-anticipated decision… We’ll find out about an interest rate cut on Wednesday. While the markets watch all FOMC meetings closely, next week’s will be especially significant. The Fed had its annual meeting in Jackson Hole, Wyoming, last month. There, it locked in a rate cut at the upcoming meeting. Next week, we’ll finally learn the size of the cut. The market will also zoom in on any guidance on potential rate cuts after that. That will flow into stocks, bonds, and currencies. With so many large and moving parts like this, you know that it’s going to be an exciting week. Send any questions, suggestions, or other comments to feedback@opportunistictrader.com. Happy Trading, Larry Benedict
Editor, The Opportunistic Trader | 
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