We have a lot of CENTRAL BANK activity this week, plus the markets are entering HOLIDAY mode. Expect choppiness and erratic behavior with swings that will make little sense.

It is best to lower your notional amounts and become less active in markets.

There is a hint of RISK OFF in our view, and we want to be pitched to what we believe will be a 500-700 bps correction in risk, particularly in the TECH sector.

We feel those valuations are tremendously high and that the FED’s actions will force some investors to take profit and scale back a bit on those long positions.

Our base case is for the NASDAQ to correct 700-800 bps, with some individual names having a bit of a deeper hair-cut.

That should translate to Cross-JPY being offered, as per our previous post, we like SHORT CADJPY as an expression of this view. We are also looking at some EURXXX as we feel the EUR will be better insulated than HIGH BETA FX in the event of a RISK OFF move in currencies.