Jackson Hole 2020: Hold the Scenery, Keep the Drama

The bar is set remarkably high for Fed Chair Powell tomorrow morning, as a virtual version of The Fed's annual Jackson Hole, Wyoming, get-together will be live-streamed just before the opening bell. The expectations are for a ground-breaking inflationary pivot by The Fed, which is something we will discuss in my full market recap for Members tonight in more detail.  

Even as small caps, banks, biotech, energy stocks, and many other individual issues flash red today, the heavyweights at the very top of the Nasdaq continue to melt higher, even rotating within themselves (e.g. NFLX). 

My thinking here is to simply trade the reaction to tomorrow's events, if any. Recently, we have seen this market essentially yawn off just about anything since the March lows, including violence in major American cities, the economic, public health, and psychological/financial fallout from a rare pandemic/lockdown combination, uncertainty about a coming election, among other factors. 

However, I suspect we are finally at that moment in time where the rubber meets the road, as there is a good chance the market has spent the better part of this summer pricing in this very event, which is sure to have everyone screaming "inflation!" by the time it concludes. I doubt the market will make things so easy, at least initially, which is why I still think the Dollar is ripe to squeeze.

Also note the VIX, as one of our Members astutely noted, pushing session highs into the bell. It may just be some protection into the event tomorrow being bought to hedge off equity longs.

But we sure are due for some drama, especially with speculative fervor in tech-land rivaling parts of 2000 at this juncture.