Option trader Pete Stolcers, of OneOption.com, takes a technical look at the S&P 500 and explains that since September is a quad witch and options expiration is two days after the FOMC, he expects that options traders are gong to see some wild moves and thinks the IVs should stay high.

Posted 10:30 AM ET Wednesday—The market sold off hard last week and it tried to bounce. Given the magnitude of the decline I felt the probability of a three-to-four day rebound was high. The move was brief and shallow.

Monday the market sold off and we had follow through selling Tuesday. I viewed this as an absence of buying. Asset Managers did not hear dovish statements from the Jackson Hole conference and they pulled bids. Major moving averages have been breached and no one feels like they will miss the next big rally.

China is closed for holiday the rest of the week and we are in pre-holiday mode. Trading volumes will be light.

This decline has not been about our economy and I doubt ADP, ISM services, the Beige Book, or the jobs report will have much of an impact. The numbers will be good enough to keep the Fed in lift off mode, but not strong enough to instill confidence.

The overnight moves have been huge and swing traders should stay sidelined until the FOMC.

September is a quad witch and options expiration is two days after the FOMC. We are going to see some wild moves and the IVs should stay high.

The price action is momentum driven. Day traders should stay with the momentum until it stalls. When prices flatten out (compress) go to the sidelines and wait for a breakout or breakdown.

I will be day trading until the FOMC. I find stocks with relative strength and weakness and then I wait for the market to move.

This should be another volatile day.

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By Pete Stolcers of OneOption.com