Ahead of Janet Yellen’s testimony in front of Congress tomorrow morning, I have questions I want you to ask yourself:

1. What are the chances that Yellen’s remarks will have wording in it that will create a selling frenzy for equities tomorrow? 

– Answer: Odds are not favorable. A lot of damage has been done, she isn’t going to want to add to it after her disastrous rate hike. 

2. What are the chances that Yellen, realizing that she looks like a complete moron for raising interest rates in the face of a recession threat back in December, says something purposefully, that would make her out to then become a moron’s moron? 

– Answer: Odds are not favorable. Again, saying something stupid here, will not only make the markets sell-off, but will make her out to be a horse’s patoot. 

3. What are the odds that Yellen attempts to save face by saying something that will calm the markets and even goose them higher? 

– Answer: Odds are favorable. A rising market makes her decision from December look more acceptable. That is the only way she is vindicated for the rate hike. 

4. Odds that any pumping by Yellen marks a bottom in the current selling? 

– Answer: Odds are not favorable. Just look at what happened when Japan went NIRP. How long did that last? One day. Just one day. So don’t get your hopes up for a bottom.  

5. Even if you can correctly position your portfolio for the ultimate direction the market will take following Yellen’s remarks, what are the odds that there won’t be plenty of volatility on the intraday charts that could risk you being erroneously stopped out while trying to appropriately manage risk? 

– Answer: Odds are favorable

My Conclusion: I’m staying 100% cash tonight. I covered my two short positions this morning and after trying to dabble some in $IWM to the long side, I closed that position out as well. If the market sells off tomorrow, then fine. I am 100% cash while the market is going to waste. If the market rallies, and is a legitimate day of trending higher, then there will be opportunity to get long as the market moves up.

To me, I am in a win-win situation here.