Is the Market Bewitched?

The ES (E-mini S&P 500) futures have experienced significant volatility this morning, with price initially gapping down from yesterday's close and now trading around 5615.00, representing a substantial decline of 47.50 points (0.84%).

This morning's price action shows classic triple witching characteristics with sharp, directional moves and elevated volume. The initial gap down followed by further selling pressure suggests institutional positioning ahead of today's quarterly expiration.

Based on the current price action and the heavy put open interest around the 5550-5600 strikes identified earlier, we're likely witnessing gravitational pull toward these significant option levels. The market appears to be seeking equilibrium near the 5600 strike, which aligns with the documented pinning effect common during triple witching sessions.

As we approach the close, expect increased volatility with potential consolidation between 5590-5610 as market makers delta-hedge their positions to maintain gamma neutrality around the 5600 strike, which has emerged as the probable settlement target for today's quarterly expiration.

The next destination lower is the 5550 strike.