I've banned my family from the house, and am delaying my attendance at this afternoon's festivities at the beach to sit in front of my screen for a couple of hours. I think the Fed meeting announcement may offer the opportunity to pick up (or give away) a few quick dollars on a trade.
The run-up in stocks, run-down in Treasury yields, and decimation of the $ over the past weeks may have something to do with the expectation of QE part deax. If there is no announcement of such this afternoon, we could see a nice reversal. Even if there is an announcement, it could be a "buy the rumor, sell the news" type moment.
How to play it the possibility that there is no QEII announcement... a few possibilities. One would be the buy the DX or calls on the DX. Another might be to sell T-bonds or puts on T-bonds ...
Okay, thought about for a minute and bought some puts on T -bonds and sold short some AUD vs the USD. I like the risk/reward here.
Update at 9 AM on Wednesday ...
Covered the AUD short at a 50 pip profit and the T-bond puts at a small loss. Made enough to buy a a few dozen top-necks for dinner and then take the kids out for ice cream tonight!
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening.