I am going to mow the grass and put in some tomato plants. The best way for me to handle these FED days is to ignore it and stick with my overall plan. Dead most of the day then a couple rips up then some down.Which way it eventually moves no one knows. I wait till the dust settles tomorrow or Thursday.
Tomorrow...Explosive?
- Thread starter trade-ya1
- Start date
Quote from trade-ya1:
At the risk of embarrassing myself, I'm feeling that tomorrow may be explosive in many markets. I think a lot of markets are at critical junctures, (ie. the $ has rallied to a point that much further rally might be considered a long term trend change, bonds have been steadily creeping up and could be explosive to the upside and equities are scitzo every other day). My bet is explosive rally in bonds after FOMC hike of 25 bps as market interprets this as one of the last hikes of the cycle, $/Eur takes out stops to the downside (of Eur) pre-FOMC and $ sells off hard after the decision (EUR range 1.2760-1.2980 closing at highs). Equities rally on higher bonds but selloff into the close on a weakening economy. I might buy some one-day vol. and forget my predicitions.
Trade-ya -- Great thread you started!
Nice to hear a gameplan posited for today.
I think one issue that might cause some volatility is the possibility of removal of "measured pace" -- last meeting, the street was assuming a drop of that phrase would imply a possiblity of 50 hike in the near future. However, this time around couldn't it also mean the fed is considering backing off sooner than expected?
Re currencies, it feels like the market is no longer treating the dollar as a single story vs all other currencies; obviously the china reval has led yen acting strong on it's own, but I think at this point each currency will have to prove it's own worth while dollar consolidates. If that's the case, I think there's still a bit of anti-dollar premium that needs to come out of euro as yet.
I think one issue that might cause some volatility is the possibility of removal of "measured pace" -- last meeting, the street was assuming a drop of that phrase would imply a possiblity of 50 hike in the near future. However, this time around couldn't it also mean the fed is considering backing off sooner than expected?
Re currencies, it feels like the market is no longer treating the dollar as a single story vs all other currencies; obviously the china reval has led yen acting strong on it's own, but I think at this point each currency will have to prove it's own worth while dollar consolidates. If that's the case, I think there's still a bit of anti-dollar premium that needs to come out of euro as yet.
I don't think trade-ya is here to make some one-time prediction to wow the crowd -- from his prior posts, I have a feeling he does something like this every day. If he's right, he will make a profit; if wrong he loses. But I think that's the plan from the start.
Besides, usually by the time you let the market tell you which way it's going, it's already gone
Coming soon
Dow to 10350
or Dow to 9700
I think 10260 may be the top, but 350 could be tested before the fall to 9700.
Which offers the better risk/reward from the current level ?
Dow to 10350
or Dow to 9700
I think 10260 may be the top, but 350 could be tested before the fall to 9700.
Which offers the better risk/reward from the current level ?
The FFFs have four meetings untill Oct. The Oct FFFs are showing a price reflecting a 3.50 rate by then. Since the October is not a meeting month, that means that there is one pause in the FED raising rates factored in.
The idea is that if the FED pauses, the FED will probably slow down the rate of increases in later meetings. This, coupled with the fact that Greenspan is retiring in '06, can be read as bullish assuming no other market factor affecting the markets, like a second day spike in oil prices.
However, the one caveat is if the FED removes the word measured _and_ it highlites that with the word inflation. In that case, the markets will probably get pummuled because that means that one or two .50 basis raises could come in between now and the Oct meeting. I really doubt this scenario, but who knows...
nitro
The idea is that if the FED pauses, the FED will probably slow down the rate of increases in later meetings. This, coupled with the fact that Greenspan is retiring in '06, can be read as bullish assuming no other market factor affecting the markets, like a second day spike in oil prices.
However, the one caveat is if the FED removes the word measured _and_ it highlites that with the word inflation. In that case, the markets will probably get pummuled because that means that one or two .50 basis raises could come in between now and the Oct meeting. I really doubt this scenario, but who knows...
nitro