I’ve touched on this a couple of times before.
When trading ahead of what we in the biz refer to as a “risk event”, you’ve seriously got to question “why” you’d look to take on any additional risk in “getting it wrong”. The fact of the matter is – you’ve got absolutely no clue how it’s going to pan out, and you’ve got no good reason to “trade it” if not looking at it as a complete and total “roll of the dice”. You want to gamble – fine. Take a small percentage of your account, have fun with it, take your chances and hope for the best.
That’s “NOT” how I roll.
This Wednesday’s Fed meeting, and expected announcement of reduced stimulus, is undoubtedly the most highly anticipated and potentially dangerous “risk event” we will have seen in markets in at least the last couple years.
You cannot afford to be on the wrong side of it.
Reading/researching over the weekend , I’ve come to the conclusion that the bond market has clearly priced in the news, but that U.S equities haven’t moved a muscle, and that forex markets are hanging in wait.
I will look for any “and every” opportunity over the next 72 hours to eliminate exposure, take profits, reduce positions, sell into strength etc in order to “ideally” be as close to 100% cash for Wednesday afternoon’s announcement.
This is trading not “fortune-telling”, and I don’t give a rat’s ass which way the market decides to go “post Bernanke” – only that I’m going along with it.
We’ve got fron Sunday night til Wednesday afternoon. Raise cash – don’t be a hero.