Risk Event – Trade With Caution

Well here we are. It’s Wednesday and the highly anticipated FOMC statement is due out around 2 p.m.

I consider this a “risk event” and advise trading with caution – even AFTER the statement has been made public.

It’s my feelings that “this one in particular” should act as the catalyst or “trigger” for the next larger scale move in markets, as traders look for further clarification ( or any clarification for that matter ) as to what on Earth the Federal Reserve is planning to do next.

With the clouded daily talk of “tapering vs no tapering” and the fact that U.S equities have been trading virtually flat for the past 2 weeks, it looks pretty clear to me that equity traders ( completely “jacked up” on QE ) have put on the brakes and entered “holding patterns” until the smoke clears here this afternoon.

Firm statements confirming that “yes indeed” the Fed is planning to start its tapering in September will send the market down fast, as equally mention of continued QE of 85 billion per month “should” keep things buoyant (although in this case I wouldn’t really count on that either).

This has gone far enough, and further suggestion of “continued easing” should be interpreted as “being needed” which is essentially suggesting that the “so-called recovery” is still very much in need of assistance. With USD “still” wallowing here at its near term lows – we will likely see some kind of “knee jerk reaction” to the statement, and then see markets digest the news  and move accordingly.

I am 100% cash as this is most certainly a “risk event” so……my plans are to wait until “after” the statement, evaluate market reaction – THEN jump on it.

Watch Twitter here this afternoon, or perhaps even here at the site for a quick “afternoon update” and suggestion as to how to take advantage.

2 Responses

  1. Jworthy July 31, 2013 / 11:14 am

    Thanks Kong! Look forward to seeing how this play out.

    By the way, is that a new pic in your sidebar?

    High-five dude…

    • Forex Kong July 31, 2013 / 11:22 am

      New pics and – new web stuff on the way yes!

      Today’s Fed garb is highly HIGHLY anticipated – and will most certainly create fireworks. These days putting your finger on the “future direction” of markets has obviously been challenging so…….this should be a wopper!

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