Rate hike is 100% known. What is not known is the PA afterwards.
The top panel for chart below is dec 2013, when big ben announced tapering of QE, to the surprise of the mkt. Middle panel is Dec 2014 and bottom panel is this Dec so far:
In Dec 2013, market sold off initially and then rallied for the rest of the year, focusing on other mellow / dovish wording coming with that tapering announcement.
This time around, there is not that much of a surprise component on the monetary policy / rate decision. Yellen for sure would love to to pull a big ben, ie profuse dovish tone will still be there to calm down the mkt together with the announcement for initial hike. Grandma will say things like "measured pace", "data dependence", "extended support".
Tax selling has abated today and has more or less been done (if you follow 2014 Dec, you see similar pattern into the FOMC meeting), and selloff so far has been less vicious than the two previous Decembers. My working hypothesis / roadmap is for the pattern to repeat, if not earlier. So if u can hold on tight until mid next week, it will be easier to go long for the rest of the year. If you do not want to miss the santa claus polar express train going into Holidays, you can scale in 20% a day for the next few days.
YMYC. YMMV.
Just my 2c.
