February 7 - Biggest Day of My Trading Career
I have traded through the market crash of October 1987, February 2009 and several other very interesting days. But I think tomorrow may well be the biggest day of my trading career. It will be a one-of-a-kind event, that could never have happened in the past and may never happen in the future.
What is it? The BLS reports Unemployment Statistics tomorrow for January. When they do, the markets should react sharply. Interest Rates should skyrocket, Treasuries should crash, and I have no idea what equities will do. But I believe the Unemployment Rate reported tomorrow will be the lowest since early 2008 (before the crisis) and will reflect "Full Employment". This should stoke fears of inflation and should prompt the Fed to consider accelerating the Tapering, which Philadelphia Fed President Charles Plosser has already called for . The reason for the drop, and why it is a one-of-a-kind event, is that the Extended Unemployment (up to 99 weeks), which went on for YEARS, ended at the end of December. This extended and protracted expense has never happened before in US History (even during some pretty difficult recessions in the 70's), so we can not easily predict what the markets will do when it ends.
Personally, I will be taking additional short positions in Treasuries (Long TBT) and a Long position in some key equities, but I really don't know how equities will react. If you care to respond to this, imagine what a 4.8% Unemployment Rate Announcement would do to Equities and suggest any trades. I don't know that we'll see 4.8% tomorrow, but we'll see it soon - likely in the first half of 2014.
Enjoy the Friday!!! Should be very interesting!!