Over the past three weeks, the major U.S. market indices have gained strength and have held their 2022 lows. Beaten-down stocks such as Tesla (and TSLA Quick Quote TSLA - Free Report) , Alibaba ( BABA Quick Quote BABA - Free Report) , Apple (have rallied back fiercely off their recent swoons. Today we will provide our opinion on the short-term view of the market: AAPL Quick Quote AAPL - Free Report) Options Expiration Often Leads to Short Term Choppiness Monthly options expiration in U.S. markets typically falls on the third Friday of each month. This Friday marks monthly options expiration. Options expiration, also known as OPEX can lead to increased choppiness in the stock market because as options expire, bulls and bears often alter their positions as time runs out. The outcome of these modifications results in increased volume and volatility in the specific stock and the market itself. Furthermore, options that are “in the money” at the time of expiration get exercised – increasing trading volume and volatility to a greater extent. Earnings The market is smack dab in the middle of earnings season. Earnings can often lead to increased volatility and choppiness as well. Tuesday was a perfect example. Shares of Morgan Stanley ( popped after the banking giant beat earnings expectations Q4 expectations. MS Quick Quote MS - Free Report) Image Source: Zacks Investment Research Meanwhile, Goldman Sachs ( sank after reporting a larger-than-expected drop in Q4 profits. GS Quick Quote GS - Free Report) Image Source: Zacks Investment Research More key earnings reports with market moving potential are on tap later in the week, such as streaming giant Netflix ( and consumer products king NFLX Quick Quote NFLX - Free Report) Proctor and Gamble ( PG Quick Quote PG - Free Report) . Is Frothiness Creeping In? The market is showing some subtle signs of frothiness in the short term. First, the Williams % R Oscillator is at the most overbought levels since late November when the major indices each shot up 5% in a session. Of course, overbought can become more overbought and does not necessarily mean the market will fall precipitously. However, it does usually mean that the odds favor some sort of back and fill or corrective price action. Image Source: Zacks Investment Research Highly speculative equities like meme and crypto stocks are rising rapidly. Usually, these price moves occur when things get a bit too hot. For example, Bed Bath and Beyond is on the brink of bankruptcy yet it has tripled in the past few weeks. The Valkyrie Bitcoin Miners ETF ( is up 87% in the past two weeks of trading. Chinese ecommerce retailer WGMI Quick Quote WGMI - Free Report) Vipshop Holdings ( has moved higher for eleven weeks in a row and doubled in that period. VIPS Quick Quote VIPS - Free Report) Image Source: Zacks Investment Research Lastly, Tesla, which is up 30% in three weeks’ time, saw a tremendous amount of call option activity pour in. Traders doled out a whopping $50 million on call premium alone Tuesday. Conclusion The intermediate and short-term trends remain higher after stocks were able to hold their 2022 lows and rally over the past few weeks. With that said, investors have some potential obstacles to contend with in the short term and should not get caught chasing an extended market with too much exposure as options expiration and key earnings loom. As always know your time frame and mind your risk accordingly.