what do the fed fund futs say? what are the chances for a hike?
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Will the Fed pause on Tuesday?
- Thread starter Rearden Metal
- Start date
I think Ralph00 has it correct, the recent run-up in the inflation numbers are being caused by factors outside of the feds control. Remember the Fed can only tighten or relax the money supply and neither will have an effect on energy prices and the resulting bleed through. I think no ease yet and a 75% of adopting a neutral policy. Buying the two year t-note is a good bet even with the recent run-up.
Does anyone here trade Fed Funds Binary options on the CBOT? I think the Fed is going to have to tighten at LEAST 2 out of the next 4 meetings left in this calendar year. I'm in the 5.75-6.00 range due to the stronger than expected inflation pressure and consequent WEAKENING of the DOLLAR as (foreshadowed on Thursday-Friday. Notice how weak the dollar was on threat of a rate pause?). The Fed has to stand by its pledge to fight inflation, even if they have to sacrifice the econonmy for a short period. Fed will have to tighten to 5.75 and possibly 6 by december meeting.
(Related Aside) US recession is on the horizon, watch for a weak rally on low volume if Fed pauses. Market will peak below its May highs and begin to slide, possibly, towards a crash precipitated by a surprisingly bad Q3/Q4 GDP/inflation/earnings report(s) and the realization that the markets are overbought... imagine high velocity outflow of hot money. This risk is only enhanced by the efficiency of the programs and algorhythms rocking the markets today. Think about the nature of financial markets and speed of price movements today as compared to 2001 and the 1980's.
The market could tragically oversell simply based on the efficiiency and speed of todays trading technology. Think about how quickly stocks like GOOG, CME, PD, SNDK move... imagine how these stocks will gap down once the bulk investors start to execute large block orders to get out of the riskiest stocks - very bad Q3/Q4 earnings are the best candidate for the commencement of this coming fiasco. SPY could easily penetrate their intermediate low of ~75 and approach 60...
Anyway, I'm milking the fvcking screws out of this one. Money time.
(Related Aside) US recession is on the horizon, watch for a weak rally on low volume if Fed pauses. Market will peak below its May highs and begin to slide, possibly, towards a crash precipitated by a surprisingly bad Q3/Q4 GDP/inflation/earnings report(s) and the realization that the markets are overbought... imagine high velocity outflow of hot money. This risk is only enhanced by the efficiency of the programs and algorhythms rocking the markets today. Think about the nature of financial markets and speed of price movements today as compared to 2001 and the 1980's.
The market could tragically oversell simply based on the efficiiency and speed of todays trading technology. Think about how quickly stocks like GOOG, CME, PD, SNDK move... imagine how these stocks will gap down once the bulk investors start to execute large block orders to get out of the riskiest stocks - very bad Q3/Q4 earnings are the best candidate for the commencement of this coming fiasco. SPY could easily penetrate their intermediate low of ~75 and approach 60...
Anyway, I'm milking the fvcking screws out of this one. Money time.
Quote from BrandNewTrader:
So far so good. I've made my first entry, plan on adding twice more. Once right before the Fed decision, hopefully they pause, the market ralies and I can make my final and largest entry when all of the puts are cheapest.
At that point it will be a waiting game. I'm long SPY puts expiring in 12/06, 03/07, 06/07, and 12/07. Strikes range from 105 down to 85...
Not interested in put spreads since I think SPY may fall as low as 65. Nothing to do after this but sit back and wait...
Your trading account is on a collision course with disaster.
Quote from Rearden Metal:
Your trading account is on a collision course with disaster.
sorry but i have to agree...all the easy money to be made on the short side has already been collected...august might not be typically strong but also december usually is and it doesn't always pan out. given the recent round of declines odds for lower prices [65 on spy R0R!] are sort of astronomical.
Quote from ralph00:
Don't know what everyone here is smoking. The Fed is done for now.
Whether the Fed is right or not, I don't know. However, they feel that the inflationary uptick is transitory due to high energy prices (see leak to Grep Ip in today's WSJ). They also know (and this is really not disputable) that inflation is a lagging indicator. Inflation has been on an upward path well into the last few recessions and did not begin to tick down until we were into a recovery.
As far as coincident indicators - employment, manufacturing, retail sales, ... - all are slowing.
As far as leading indicators - money supply growth, housing, yield curve ... - all are seriously tanking.
To sum it up: lagging indicators pointing up, coincident and leading indicators pointing down. The Fed is done. You want to be long 2 years.
High oil is here to stay period. It will go higher it is not transitory, when was the last time oil stayed this high for this period of time?
why do you think his trading account is headed for disaster?