Prepping for the Most Important Fed Announcement Ever

• Posted by Greg Harmon
• on September 17th, 2013

So the expectation/talk is that Fed starts to taper with a cut of $10-15 billion in bond purchases tomorrow. From there I hear a lot of discussion about how the mix of bonds and mortgages will make a difference. Well, maybe that is true if you are a bond trade. If you trade equities I challenge you to tell me the current mix between bond and mortgage purchases and then how the mix will impact you. I have no idea what they will announce tomorrow but have been at enough banks to know how the CIO’s of large firms are preparing. chants of ‘Let’s be a little more conservative’ have been heard through out the investment landscape. How that relates to their positioning is anyone’s guess. But it does signal to me that anything less than 20-25 billion stands a good chance of rallying the market. As for the bond market, whatever happens tomorrow or the next week is likely unimportant in the longer term trend higher in rates, unless the Fed were to say “The US economy is F$#@d and we will never cut stimulus.”

My preparation has consisted of watching the charts of stocks that I have positions in and acting according to their signals. Oh, by the way, that is what happens every week. The only difference for me this week is that I am not in a hurry to load on a lot of new positions ahead of this Historic Announcement. How are you preparing?

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