Strap On Your Helmets

Fasten your seat belts and strap on your trading helmets – it’s going to be a rough day! I was chatting with Scott this morning and his take on the whole Ruble/Fed/Crude situation was “Anything and everything can happen today.” Exactly right but that makes for shabby blog posts, so let me try to shed at least a little light on what we’re heading into:

I’m actually considering to get myself one of those predator helmets – super bad ass. Would look pretty silly on the little moto I’ve been using here in Valencia. Perhaps better to get a Ducati first. No worries – very safe bike as Mrs. Evil would never let me ride it – she has seen the stunts I pull in traffic.

Okay, this is the laundry list of event risk we’re up against today, starting at 8:30am with the CPI numbers for November. I don’t think it’s going to matter as much as the Fed interest rate decision. Don’t expect much movement on the equities side until Yellen’s announcement.

So far we’ve seen nothing but lower highs and lower lows, with two attempts to overcome the 100-hour SMA. The game has been played however and today’s resolution will come after 2:30pm – brutal and inflicting as much damage as possible.

Frankly speaking – as tantalizing as the situation may be here, it’s a very tough trade unless you are on the inside. It’s a coin flip and it’s fine to take out a lottery ticket unless you risk more than 1R. Options are impossible here given where we already are on the VIX front – so screw the vega play (unless you’re selling but let’s not go there). I’m going to stay out of this one – sorry – cyclone level conditions like these are beyond my pay grade.

EUR/USD is the only setup I like this morning but given what’s going on I’m only in it for 1/3R – AND I’m hoping to be stopped out as the rising Euro is a big thorn in this expat’s eye. ISL actually below 1.242 – I changed my mind after realizing the flood of events we’re facing today. So it’s really just a teeny weeny play and chances are it’s going to get shaken out.

Bottom Line: Plenty of excitement in the works today but very little entry opportunities. I’m keeping a bucket of popcorn ready and see how it resolves. Forget about support levels on the equities side – if 1955 goes for whatever reason today then we’re dropping to 1900 like a rock. Similarly, if rates are being kept lower than anticipated then we should see a massive jump. Word on the street says that Yellen is not going to mess with the state’s department’s plan to declaw Putin once and for all. But I’m not going to bet money on macro economics/politics, leaving that for people smarter (and more connected) than me.

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Cheers,