Whichever Way It Goes It Will Likely Go A Long Way
The opportunity will lie in having dry powder, clear thoughts, and disciplined conviction to play what is likely to be a sustained move
Despite all the rain in the Nation's Capital, at just about 2:15 p.m. Boom Boom will leave behind "green alligators and long-necked geese some humpty backed camels and some chimpanzees", emerge from the arc, and hand down to his subjects the latest commandments on monetary policy.
It has been a while - a long while - since the last time there was so much anxiety and confusion over a Fed meeting; and just imagine if Boom Boom's stated intentions were to be less transparent. I know, I know, you may be asking yourself "Who are you calling confused?" and you may be thinking that the landscape could not be clearer; but - at least by looking at the coiling patterns in the charts (S&P futures, silver futures) - it seems like this time the "lost sheep" are indeed ruling the arc. The likely consequence is that once most traders have had a chance to read the Fed's statement - they will likely gaze dazed and confused at each other for a few milliseconds, before one shall scream "Buy," the other one "Sell," and the masses will begin trumpling each other in a process that will violently unwind the recent sense of calm enjoyed by the Minx.
I assure you that in the above psycho-babble there is no "DaVinci Code"-like revelation of some arcane technical indicator that "knows" with reasonable certainty which way the markets will break at 2:20 pm. To the contrary, If you have no clue as to what I am rambling about, I am obviously succeeding in A) my efforts to emulate the writings of my soccer-hating idol Fast-Money-TVJeffMacke; and B) in rendering a visual of the total chaos that is likely to follow the birthing of Boom Boom's latest mental contortions.
In such an environment, the opportunity will lie not in the first handful of offsetting 10-handle swings in the Spoos, but rather in having dry powder, clear thoughts, and disciplined conviction to play what is likely to be a sustained move. I am fully on board with the consensus that we are at "critical" levels in the markets, but not so much because of the price levels of stocks, gold, silver, bonds, etc., but because economic imbalances are forcing the purse-string holders to tinker with the liquidity that has kept all financial markets going. If the markets "feel" that the Fed's decision leaves them room to continue playing, the short interest and bearish bets of late will likely get smoked in a rampage to new highs. If the markets think that the party is over, the second down-leg of the secular bear that began in 2000 may be on its way. Either way, neither scenarios will play out between 2:15 and 4:00 on Thursday.
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