Let’s frame this up succinctly: When one of your market leaders loses $35B in market cap in a day people start paying attention. Today it was $MSFT and $CAT that made clear that the volatility in currencies and oil we talked about indeed has negative consequences.

That’s a lot of bag holders since the October lows:

January has been volatile and rough for those mispositioned or counter trading the wrong way. As the month is coming to a close then it’s all about the Fed again as it always is. In October the BOJ juiced things further after Bullard’s QE extension comments, in November it was the Chinese rate cut, in December it was Janet Yellen herself with her market soothing rate raising “patience” and of course last week it was Super Mario with Super QE:

So you see every month central bankers are at the ready and tomorrow it is Janet Yellen’s job to save the month:

Reality Check. pic.twitter.com/TZsSMpThv8

— Northy (@NorthmanTrader) January 27, 2015

Bollocks indeed. Reality is the Fed is in a self inflicted penalty corner. It ended QE last fall and raised the possibility of rate raises. Since then the globe has embraced QE and cut rates all over and US economic reports have largely been disappointing. And why wouldn’t they? Retail sales, PMIs, durable goods, etc all have been struggling. Add the strong dollar hitting earnings and crashing oil dampering the highly heralded US oil economy and all of a sudden things don’t seem all that rosy.

Now there are bright spots. MoMo is still in play in some pockets, but even here everything appears a chase with sometimes ominous patterns:

$AAPL is on tap tonight and its report will be significant. If $AAPL can’t produce a good earnings report then who can?

The flip side is $AAPL giving the all clear with a solid earning report and outlook and Janet Yellen smearing sweet central planning nothings into everyone’s ear and we jump from here. The $AAPL chart actually looks pretty bullish:

There is plenty of incentive to face save this month before Friday’s close and with Yellen on tap they have the means and capability to do it.

How could do she it? Easy. How about: “The committee maintains flexibility to reintroduce QE as necessary” Dow +500. Done.

I’m not predicting this of course, but it shows the fragility of any given trading position into such a meeting. Whatever the outcome tomorrow January is coming to a close on Friday and plenty of fund managers are under the gun already. Mark-up efforts wouldn’t surprise.

In fact one can also outline a really bullish case with an inverse pattern on the $SPX which could confirm with a break above $SPX 2065:

What can traders do? Remain flexible and trade the set-ups. For us we had shorted the #DAX yesterday, covered most today and flipped long into the key support we had outlined:

We’ve bounced nicely since then and used the gains to scale out some and lock in some nice profits.

In summary: $AAPL for tone, Janet Yellen for the month end home run. Would she ever rock the boat? As far as I can tell she never has in her life and the next FOMC meeting is not until March. She may try to delay the inevitable, but bollocks is bollocks and there’s plenty of stress in the system and investors have come to learn that prices can swing wildly in everything. Just ask all the buyers of $MSFT since last October.