My only options position right now is puts on DIA, so naturally I watch the /YM futures closely. They were down a little pre-open, but the moment the bell rang, they exploded higher for No Particular Reason ™. Just as suddenly, they did a hairpin turn south and plunged triple digits.
Everyone’s on edge about tomorrow’s absolutely meaningless interest rate drop, which I think is going to be one of the “Buy the Rumor/Sell the News” events of all time.
If you want a sense of how much trouble the Fed is in, look no further than gold. Every day, another lifetime high.
For a different angle, also take a look at silver, which strapped on its booster rockets in early April and has barely looked back.
Getting back to equities, what we’ve seen on the /YM futures is a lifetime high last December and a nearly perfect double top just days ago. My dream scenario, of course, would be either a sharp turn away from this horizontal or, even tastier, a false breakout above to get the bulls all amped up tomorrow, only to go into a free-fall.
There are eight of these damned FOMC freak shows every year, and it’s a relief every time one more passes by. It’ll be vastly easier to trade starting Thursday morning than it is right now, so I remain quite light at a mere 60% commitment level in my portfolio.
