https://no01.substack.com/p/quadwitching
No1
Sep 15, 2026

In 1692 the good people of Salem figured out what was wrong with their village.

Witches. Obviously!

Nineteen hangings later, some started to suspect they might have been a little bit too hasty.

This Friday the witches come back. Four of them.

Let’s first get the jargon out of the way. Quad means four in some ancient language that No1 speaks anymore but everyone uses to sound super-smart.

Witching… Well, witches are bad, right? Personally I doubt it, I never met one, but I’m pretty sure as with everything in life and nature there will be evil and there will be good ones. If they exist. Kind of like pink elephants. Though the latter only come out after something bad. Even though I feel good at the moment. But I digress.

But the general feeling is “witches are bad”.

And so, this Friday, the 18th, the four witches arrive together.

Stock options, index options, index futures and single-stock futures. They’ll all be expiring on the exact same day. With or without their own quad or broomstick or whatever.

Somewhere north of six trillion dollars in notional rides along. Closer to nine if you count everything expiring this week.

And anyone who’s ever ridden a quad knows the one rule: it’s the most stable thing on four wheels. At walking speed. But take it for a spin and turn a bit too hard? You’ll know how much a ton weighs fairly soon.

Which is, if you think about it, a VERY apt description of “quad” “witching”. Even though the quad means four. I presume. Now I’m not so sure anymore.

Every quarter (again that blasted four!), the whole town quietly agrees not to turn too hard during witching week.

Central bankers, politicians, market makers... no-one.

The VIX gets steered gently into Friday like my bartender walks me to my taxi after yet another night.

For as long as I can remember, this has happened. VIX down in quad week. Even in March 2020, plandemic in full swing (context: VIX was above 80 - which means: THE WORLD IS FRICKING ENDING), even THAT Friday, it went down 8% to 66.

Which makes this week’s calendar… peculiar.

Tomorrow the Fed decides to hike or not. Trump wants a cut, the economy needs a hike to contain inflation. So my best guess: it’ll be a hold with hawkish bla-bla.

Crude oil options expire Thursday. Crude is still around 100 where it should be double. But that’s a topic I already covered in the past:
Running on empty
Running on empty
No1
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And with a mountain of puts on the line, No1 wants to topple that particular apple-quad.

Then the Bank of Japan will wrap it up on Friday, where Ueda will start talking after Tokyo has closed for the (Japanese-timed) weekend.

And then the witches ride (or fly?)…

So yep. Eventful week.

But someone didn’t get the memo.

Saturday, Dario Amodei (Anthropic) published an essay titled “We Must Pace the Frontier”.

Slow down to speed up. All of us, together, for the good of humanity.

Sam Altman (OpenAI) instantly agreed to it.

Even Musk couldn’t help himself to tweet “Dario is right”.

Co-inkidink?

Three powerful men that wouldn’t even agree on the colour of the sky suddenly all want to hit the brakes?

Yeah. Colour me suspicious.

Anything that could potentially deflate the AI bubble is bad for business I guess, so the White House AI advisor David Sacks said to go ahead, but don’t ask for more rules. I mean, I kinda agree with the guy: those 3 are the biggest AI shops in the US. They MAKE the rules.
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On Monday even the President was tweeting (or truthing or something like that) about a “SICK conspiracy” against AI and data centres, complete with a list for the pillory: conspiracy theorists, treasonists, traitors, leakers. BEWARE.

Other reactions involve calling for a Congressional witch-hunt investigation, or claiming that something terrifying happened in the lab and we don’t know it yet.

I mean, what kind of CEO goes on the telly the month before their IPO and tells you how dangerous their own product is??

Or maybe it’s simply that Chinese open-weight models are catching up. FAST?! And those top AI shops want to adjust the rules in their favour now they still have the chance?

I mean… Salem ran on circumstantial evidence too. But we have AI now. Which we could use to produce whatever evidence there need be. We’ve evolved a lot since then!

So Anthropic wants to limit “training compute”, but signs $517B in computation deals? And will cash out IPO next month on Nasdaq? And nVidia will put up $10B in it? No circle-jerk here dear sir!

Greed is good in the US of A…

Still, I stick to my guns. The cheap labs are catching up, and pacing everyone is easier than staying ahead. It’s also cheaper.

On the other hand the FT says that Anthropic told them that they will be profitable for the second straight quarter. At least in the good ol’ days, the reporters still had the honesty to do some actual digging, not just copy/paste the press release of a company.

Asia however didn’t wait for all of that.

The Kospi dropped 3.1%, SK Hynix more than 5%, Samsung 4%. SoftBank lost 13%. The Nikkei shed about ¥23.6 trillion by mid-morning.

!BURN THE WITCH!

Then New York opened, the Nasdaq 100 fell 1.7%, and just as things were getting… lively, a headline from “Pakistani sources” arrived, oil dipped, and by lunchtime the S&P was down 0.1%.

Disaster avoided. Thank you Pakistani sources!

Nearly toppled the quad.
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Despite Dario’s best efforts, AI didn’t bleed (too much), and traders are questioning whether the Fed will hike or not. For now, it seems everyone believes they will: 94% odds of a hike.

So to make clear what the bond market thinks about that, it did this:

Warsh talked himself into a corner with his tough-guy routine. Not hiking now would cost him credibility he hasn’t had time to gather yet.

And his own board voting him down? (With Powell still at the table?) That particular box has a lid for a reason.

Hiking (and I’m not even talking hiking hard!) into the wobbling AI trade, two months before the midterms, with Trump breathing down his neck demanding a cut... also a big no-no.

My best guess? A dovish hike. Or a hawkish hold. Twenty-five basis points and a wink. Or a hold and a very strongly worded press release. Then very, very quiet until the end of October, because nobody wants to be the witch the week before an election.

The war, however, didn’t get the memo about volatility.

On Monday, the Gulf states were supposed to go have a talk with Iran about throwing ordnance in their direction. But these were postponed.

Not that these talks were ever going to produce anything.
Now they will just produce nothing at a later date.

Brent is sitting at $105ish, diesel is at a record, and energy stocks have barely noticed.

All of these are pinned under a pile of short calls (silver’s calling).

Short calls that (remember) go into Friday’s expiry, with market makers hedging them flat every time crude dares to move.

Giles Corey was pressed to death under stones in Salem for refusing to plead. Legend has his last words as “More weight”.

Silver (and now the energy sector) knows the feeling.

On Friday a lot of those stones come off.

If money is going to leave the AI trade, it will need somewhere to go.

The most obvious take is of course silver miners, but we all know that No1’s looking at that… So crude oil at a nice $100 is the other obvious place to look.

But not everything “oil”y is worthy of the same attention…

Supertanker rates hit a record $800k, roughly 10x half a year ago. BWET is up over 36x in one year! Tanker rates went up A LOT. Just not 36x-a-lot.

Autumn starts next week. Europe’s gas price sits around €83 (it was €350 in 2022). Calm enough, right? One problem: Qatar, which is supposed to be supplying Europe, is shopping for US LNG through 2031.

Developing Asia has burned $7.4 billion on spot cargoes since the war started and is quietly looking at coal again.

Yup. I’m sure winter will be fine.

And then we also have copper, which is all red piping hot on the data-centre story.

So if that Anthropic’s story really gets heeded (I doubt it will), then the copper story just lost its biggest tailwind.

Gold and silver will stay hostage to oil, deleveraging, margin calls and rates until this all clears, whatever your favourite pundit says about them this week.

And then there’s the other president of the US: Netanyahu. He faces an election in a few weeks that he’s expected to lose. But that guy only knows full-throttle.

In Salem, the story goes, the hysteria finally stopped when the accusations reached the governor’s wife.

No1 has pointed at the Fed yet.

But it’s only Tuesday.