The Alabama Slamma!
Make me proud!
"May I have your attention please. Mr. Hunter has brought it to my attention that morale may be a bit low. That you may be a bit...on edge. So I suggest this...any crew member who feels he can't handle the situation can leave the ship right now! Gentleman, we're at DEFCON three, war is imminent. This is the captain. That is all."
--Capt. Frank Ramsey, USS Alabama
Good morning and welcome back to the pressing pack. It's T-minus now in the hills of the 'Ville and the critters have already practiced their skills. "We've been here before and we all know the drill," said Hoofy the bull as he readied to thrill, "by the time the bears jump off the minxy hot grill, they'll have swallowed yet another green pill!" Is Hoofy aloof with his burden of proof or will Boo trip him up for a red messy goof? This is it so please don't be a grump as we scale up the front of Elmer's big hump!
For all the painful pins and needless needles, today's FOMC announcement is setting up to be rather anticlimactic. The only way the market will get caught off guard is if Sir Elmer deviates from the conventional wisdom of 25 bips snippage and an untouched vernacular. That's all but a given but, given a shocker, things could get mighty dicey in the city of critters. I, for one, think that we should close our eyes and take 50 bips of medicine but that's rather unlikely. If we were gonna take a lovin' spoonful, my friends, Nurse Ratched would have been on our doorstep years ago.
The "blip and dip" action of recent weeks (months) has given us ample opportunity to map out both a bull and a bear case. We see the approaching acne, feel the collective tension (quarter-end), fear the lopsided complacency (is anyone short?), we're expecting Mr. Beeks (by train) on Friday and we respect the potential for jitters in front of the three day weekend. Somewhere in the back of our crowded keppe, we're also acutely aware that an avalanche of earnings will follow the Fed and usher in conference call purgatory.
Today, however, is THE day that has been circled on calendars across the world as we're five hours from Elmer and seven hours from halftime. While the ultimate outcome is unavoidable and unpleasant, in my humble opinion, the near-term nuances are much more difficult to assess. My barometer remains BKX 96ish (50/200-day moving avgs) and if the bacons gets shakin', the acne will likely unfold. I suspect that the N's will outperform the S's once more (beta chase) but if things don't go as planned, that dynamic will likely work the other way too.
Finally, if you haven't been reading the Iron Horse, you've been missing some of the very best educational commentary out there. I've known (and read) Brian for many years and have come to incorporate his view into my own. Consistency will do that and there's a reason his nickname is what it is. Please take the time to read his excellent stuff, take a deep breath before taking the field and remember, above all else, that discipline trumps conviction.
Good luck today.
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